Forex: Market dislocation buoys non-banks
The coronavirus crisis has accelerated market trends: in FX it has made clients even more amenable to expanding their universe of liquidity providers to non-banks
The days when large banks were the only institutions capable of delivering tier 1 liquidity to the market are long gone. In many cases, the technology and pricing that non-bank market makers use and the risk parameters they have in place are on a par with the largest financial institutions.
The extreme market dislocation that occurred in March and April 2020 caused many traditional liquidity providers to reassess their business and operating models – and be more selective.