Foreign exchange debate: The future’s bright despite the tough fines

January 30, 2009

In the second part of Euromoney’s foreign exchange debate, which took place in late 2008, industry experts consider the future for the business. There is still cause for optimism, although inflation remains a big unknown and there are real fears of governments’ ability to sustain debt levels.

Part one: Foreign exchange debate - Investing in FX: learning history lessons

Delegate biographies: Learn more about the panelists

Executive summary

• Foreign exchange will go through tougher times but the future for the business remains bright

• E-commerce will play an increasingly important role

• Inflation will remain a key theme

• The spectre of government bankruptcies looms

DB, HSBC Are you optimistic for the FX business?

CKG, Société Générale Absolutely – for a number of reasons. First, while global GDP will slow, corporates will still need to carry out commercial transactions. Second, financial institutions will still need to chase alpha. Third, volatility has picked up, meaning the first two points become more relevant. Fourth, bid-offer spreads have widened, meaning the competitive fall-on-your-sword attitude to capture market share will abate. But finally, for banks that have pressure on balance sheet and capital usage, foreign exchange offers the highest revenue per unit of balance sheet used, and it is scaleable.

Foreign exchange debate: The future’s bright despite the tough fines

In the second part of Euromoney’s foreign exchange debate, which took place in late 2008, industry experts consider the future for the business. There is still cause for optimism, although inflation remains a big unknown and there are real fears of governments’ ability to sustain debt levels.

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