CME Group » FX » Third Annual Global FX Market Study
Third Annual Global FX Market Study: 2009
Main Concerns: Counterparty Credit Risk, Latency, Systemic Risks

Banks’ Concerns Differ Somewhat from Investors’

Summary of Key Findings:

  • Counterparty credit risk: Remains a concern to the broad range of FX market participants
  • Latency in electronic pricing: A significant concern for banks
  • Systemic risks
    • Bank insolvency and liquidity: Chief concerns of investors
    • Back office and settlement limitations: Chief concerns of banks
  • Vanilla options: Preferred over barrier and exotic options

View survey

Watch interview: Derek Sammann, Managing Director of Financial Products, CME Group

View press release

Counterparty Credit Findings

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  • Worries about counterparty risk remain high, with two-thirds of those surveyed citing as a concern in 2009
  • Concern about latency almost doubled from 16 percent to 29 percent

Systemic Risks: Investors

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  • Investors consider bank insolvency as the biggest systemic risk they face
  • Concerns about macro-economic problems grew significantly, and liquidity concerns were cited by more than one-third of respondents

Systemic Risks: Banks

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  • Banks are less concerned by economic problems than investors
  • Worries about a liquidity crunch declined significantly, while back office and settlement limitations more than doubled over 2009

Fundamental Shift Towards Risk Mitigation

"This year’s study with our partner ClientKnowledge illustrates that there continues to be a fundamental shift in the global FX market towards risk mitigation," said Derek Sammann, Managing Director of Financial Products, CME Group. "By offering liquidity, transparency and credit risk mitigation, we provide investors with the solutions they need to manage their risk on exchange. In addition, we plan to offer a post-execution clearing service for OTC FX trades through CME ClearPort giving market participants increased security, efficiency and flexibility."

About the Study

On behalf of CME Group, ClientKnowledge surveyed FX market participants worldwide to determine current concerns and trends. Between July and September, 2009, they polled 952 global market participants, including 394 banks, 302 money managers and 256 ‘non-traditional’ money managers or ‘leveraged’ traders including hedge funds and Commodity Trading Advisors.

More information about ClientKnowledge is available at www.clientknowledge.com.