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With the press around the world proclaiming that hanging is too good for all the ‘banksters’ responsible for destroying the global economy, the publication this week of a paper called Execution methods in foreign exchange markets by the Bank for International Settlements in Basle naturally grabbed my attention. It also reminded me of a story I once heard about how several bankers were shot in Mongolia for dodgy dealing back in the early 1990s. Hanging was clearly deemed too good for them.

Naturally when I read about how much David Gu, the head of Merrill Lynch’s global-rates division, had trousered as a reward for his sterling performance in 2008, I sent him a congratulatory email.

Figures from the Chicago Mercantile Exchange and Icap show that volumes picked up in February, but that liquidity remains very shallow when compared with most of 2008. The CME says its FX volume averaged 512,000 contracts a day, equivalent in notional terms to $64 billion. This was an 11% increase on January, but a drop of 10% on February 2008. Meanwhile, Icap has reported that the average daily turnover on EBS rose 3% in February from January to $153.7 billion. In contrast, the average daily volume for the 12 months to the end of February 2009 was $201.9 billion.

In this era of Devalue Trading (©Lee Oliver & the weeklyFiX), it is clear that many market participants are struggling to work out which currency stinks the least and is therefore worth buying. Take EUR/GBP; it’s been up and down like a whore’s drawers over the past couple of weeks, but is ultimately little changed. Analysts have made good cases for significant breaks both up and down and, typical of a range-bound currency pair, EUR/GBP has looked very bid at the highs and offered at the lows.

Martin Elsom has left Hotspot in London. He is apparently currently busy enjoying his hobby, photography. Elsom, who spent a long time at EBS in senior roles before joining Hotspot, is described by one source as: “Very, very knowledgeable about FX markets, both old school and the new order e-trading world. He’s a very nice guy – highly personable but also professionally astute.” He is predicted to be back in the fray soon.

Shortly after the Wall Street Journal disclosed which Merrill executives had been awarded bumper payouts, Gu was served with a subpoena from New York’s attorney general to give a deposition on his remuneration. But as if that was not bad enough, there was talk in the financial markets that one of the traders in Gu’s division had incurred a $500 million loss, which was not immediately apparent.

Peter Klein has recovered from the injuries sustained when he was attacked by a rabid dog in Richmond Park while out for a gentle bike ride. He is not only cycling again, but is back on the daily treadmill we call work. He recently started as the chief operating officer at Arbela Investment, the investment manager for Texel Capital.

Tullett Prebon has announced it has promoted Marcus Bolton, one of the market’s more colourful characters, to its chief executive in the Americas. Bolton succeeds Lou Scotto, who will act as a consultant to the company. Bolton’s role as managing director, volatility, based in London has been filled by Paul Dunkley. They are effective March 9. Bolton has had a long stint at Tullett Prebon and its predecessor companies, starting in 1990. Before that he worked at the fun factory called Continental Bank of Illinois.

Udi Sela has been appointed as FX and cross-asset product manager at options pricing specialists SuperDerivatives. He was previously the company’s pre-sales director. Sela reports to Ravit Mandell, the company’s vice-president, products.

Société Générale Corporate & Investment Banking appears to be having a bit of a shake up in New York. As many as six traders are rumoured to have left the bank last week. However, as they go out, SocGen has confirmed that Terry Li, who was at Merrill Lynch, and Keith Henthorn, previously at RBS, have come in. Li will cover bank sales and Henthorn will focus on institutional sales. Both report to Ajaz Jafri.

Mortgage finance will rise again

Prytania Investment Advisors has hired Paul Levy as a partner based in London. Levy is an experienced structured credit banker, having worked at Morgan Stanley, Deutsche Bank and Merrill Lynch – where he was head of exotic credit structuring. Levy will focus primarily on assisting Prytania’s clients in managing the risk in their structured finance and credit portfolios, some of which are managed directly by Prytania. Prytania’s advisory business has attracted substantially greater client inquiry since Lehman Brothers defaulted in September 2008. Its financial institutional clients are looking at better understanding and managing retained credit risk, and Levy will help facilitate that given his expertise – especially in investment-grade synthetic credit.