London Clearing Banks Widen Some Interbank FX Spreads

Britain’s big clearing banks, Barclays, Natwest, Midland and Lloyds, have widened their dealing spreads for some interbank foreign exchange transactions while keeping their corporate quotes narrow to discourage competitors from using their liquidity to poach corporate business.

According to market participants, banks have been pressing their foreign exchange departments to do more corporate business, partly for strategic reasons and partly because interbank trading has become less profitable. As