FX HedgePool Case Study: Unbundling Liquidity From Credit for a Better Exchange

Peer-to-peer trading has emerged as a hot topic as firms look to source liquidity in new and efficient ways.

February 3, 2022 Foreign exchange swaps account for nearly half of the overall FX market volume. Ironically, while their numbers are eye-popping, banks don’t necessarily love these types of trades, which are big balance-sheet consumers and typically considered low margin. Driven by hedging requirements of passive index funds, FX swap trades for rolling currency hedging positions tend to be operationally burdensome and pull resources away from highly qualified people. There is an amazing need and potential for peer-to-peer trading to develop in the FX swaps space.

This Impact Brief focuses on the benefits and challenges of FX HedgePool’s mid-market matching engine for FX swaps. Aite-Novarica Group analysts interviewed several global asset managers and banks that currently use FX HedgePool’s platform to inform this study.

Clients of Aite-Novarica Group’s Capital Markets service can download this 9-page Impact Brief. To learn more about the topic covered in this Impact Brief, please contact us at [email protected].

This report mentions BNP Paribas, Bank for International Settlements, and Standard Chartered.

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