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Screenshot of a breaking news alert e-mail from Q2 2017
As far as long, drawn out affairs are concerned, not many regulatory and governmental probes into the activities of worldwide banks have remained inconclusive as long as the high profile global investigation into the alleged fixing of FX benchmarks. One of the latest developments with regard to the investigation manifests itself in the Financial Stability Board (FSB)’s recent publication of a report around benchmark fixings which outlined a set of 15 recommendations to improve how banks deal with and process benchmark orders.
Today, Kieran Fitzpatrick, CEO of Barracuda FX, has made a comment on the matter. “Technology and automation will address many of the recent FSB recommendations around Fixing” stated Mr. Fitzpatrick.
The recent FSB recommendations around FX Benchmarks outlined a set of recommendations to be implemented by market participants to improve market structure and conduct. According to Mr. Fitzpatrick, while a number of the recommendations focus on changes in practices and adherences to codes of conduct, many are driven by technology changes.
“Many of the improvements brought about by eFX technology over the past 5 years have tended to focus on pricing, distribution and market risk management. At Barracuda FX our view has always been that every transaction is an order and appropriate technology and systems are crucial to effectively managing them.”
“However, this view isn’t particularly mainstream, and automating order management hasn’t been the highest priority for eCommerce investments within banks. But with the recent FSB recommendations this will change.”
Mr. Fitzpatrick’s conclusion is that “Netting and execution facilities for benchmark orders, transparency around transactions, internal order management and privacy requirements will be core to an institution’s integrity in handling benchmark orders going forward – and the easiest and most cost-effective way to do this is through the right technology and systems. Another interesting period ahead in the eFX revolution.”