Lesson 3 : Banks

The interbank market caters for both the majority of commercial turnover & giant amounts of speculative trading every day. A giant bank may trade billions of dollars every day. A number of this trading is undertaken on behalf of customers, but much is conducted by proprietary desks, trading for the bank's own account. Until recently, foreign exchange brokers did giant amounts of business, facilitating interbank trading & matching anonymous counterparts for little fees. Today, however, much of this business has moved on to more efficient electronic systems. The broker squawk box lets traders listen in on ongoing interbank trading & is heard in most trading rooms, but turnover is noticeably smaller than a few years ago.