Internalisation rates intact despite rising volatility

Electronic risk management systems have coped with volatility uptick

Chris Purves at UBS
Chris Purves, UBS

Internalisation rates at banks remain unchanged despite an uptick in volatility, as electronic risk management systems can still handle the level of price movements currently seen in markets, but extreme price swings could force some dealers to cut back on matching flows internally.

In recent years dealers have been targeting increasingly higher internalisation ratios – in some cases up to 90% of orders in the most liquid currencies – as they sought to cut costs, reduce market impact and cope

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