FX operations: the case for mutualisation

Return on equity (ROE) for most foreign exchange businesses remains unacceptably low, and in many cases below the cost of capital. The FX market is increasingly challenged by rising transaction volumes, flat-to-falling revenue growth, high fixed costs and declining margins. Given that FX is an essential part of any financial institution’s corporate banking and capital markets business, this unsustainable position needs to be addressed.

With traditional methods of cost containment all but