Spreads need to widen to boost liquidity

Panellists at FX Week Europe warn of illiquid markets

Yaacov Heidingsfeld at TraderTools
Yaacov Heidingsfeld, TraderTools

Spreads need to widen from their current extremely narrow base to improve liquidity in markets and turn market-making into a viable business for banks, as return of capital has shrunk dramatically due to regulatory changes, leading to a retrenchment from the space, panellists said at the 14th FX Week Europe conference.

"Spreads have to widen and we have to get used to it. No one wants to be first, but somebody will have to do it," said Yaacov Heidingsfeld, chief executive of TraderTools. "Once

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