EC249 Study Guide - Final Guide: Non-Bank Financial Institution, Fx Movie Channel, Interbank
Document Summary
Ec249 chapter 4 the market for foreign exchange. 4. 1 function and structure of the fx market. Over-the-counter market fx market is a worldwide linkage of bank currency traders, nonbank dealers and fx brokers who are connected via a network of telephones, computer terminals and automated dealing systems. 24 hour a day currency trading follows the sun around the globe: trading is especially active when market segments overlap (na = 8am-1pm overlap with. North america (la, new york, montreal, toronto) Involves: bank deposits of foreign currency, credit denominated in foreign currency, foreign trade financing, currency swaps. Two-tier market wholesale/interbank market (86% of fxm) and retail/client market (14% of fxm) Market participants can be categorized into five groups: Bank customers: mncs, money managers and private speculators. Nonbank dealers: large nonbank financial institutions such as investment banks with large and frequent trades, 47% of interbank trading volume. Interbank trades = between international banks or nonbank dealers.
