London's forex trade is $637bn a day
Wednesday 30 September 1998
The figures show that the average daily turnover of the UK foreign exchange market was $637bn per day in April, an increase of 37 per cent on the same month three years ago.
The daily turnover in over-the- counter derivatives was $171bn in the UK in April, almost twice the level of the United States, which ranked second in the survey. The UK figure showed a 131 per cent rise over the past three years as London stretched its lead on rival financial centres.
The Bank of England stressed that the derivatives figures were for "off exchange" transactions between institutions and that trading on exchanges such as LIFFE could be as much as "10 times those figures."
However, London's leading position makes the Square Mile more exposed than any other financial centre given the recent turmoil in financial markets caused by hedge funds such as Long Term Capital Management.
The Bank of England refused to comment on the actions of hedge funds and how they might be regulated in the future. John Footman, the Bank's deputy director of financial stability, said: "I don't want to offer any prescription on that. That will be one of the issues that will be raised in Washington next week [at the International Monetary Fund and World Bank meetings]."
However, its figures showed that in certain markets, such as interest rate business, the share of the market accounted for by "other financial institutions" such as hedge funds, pension funds and building societies, grew from 9 per cent in 1995 to 24 per cent this year. It is thought that hedge funds would have accounted for most of the rise.
The figures are part of a survey carried out once every three years by the Bank of England on behalf of the Bank for International Settlements.
In foreign exchange trading the 37 per cent increase in the average daily turnover to $637bn represented a slower rate of growth than the 43 per cent reported in the US and was down sharply from the 60 per cent rise reported for London three years ago. Even so, the figure was 82 per cent higher than New York, London's nearest rival.
The Bank of England said that the slower rate of growth in foreign exchange trading compared with derivatives was because foreign exchange was a more established, mature market.
- 2 Moscow voted the world's unfriendliest city
- 3 The excuses your boss is most likely to believe when you call in sick
- 4 I'm pansexual – here are the five biggest misconceptions about my sexuality
- 5 More than 11,000 Icelanders offer to house Syrian refugees to help European crisis
The one chart that shows how George Osborne is almost certainly going to be our next Prime Minister
The excuses your boss is most likely to believe when you call in sick
Bono's group has made more money from Facebook investment than from all his music
Three-year-old ultra-Orthodox Jewish children told 'the non-Jews' are 'evil' in worksheet produced by London school
Wikipedia rocked by 'rogue editors' blackmail scam targeting small businesses and celebrities
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
Jeremy Corbyn calls Osama bin Laden's killing a 'tragedy' - but was it taken out of context?
If these extraordinarily powerful images of a dead Syrian child washed up on a beach don’t change Europe’s attitude to refugees, what will?
Tony Blair attacks Jeremy Corbyn's 'Alice In Wonderland' politics
Theresa May says migrants should be banned from entering the UK unless they have jobs lined up
If you're not already angry about the refugee crisis, here's a history lesson to remind you why you really should be
iJobs Money & Business
£14000 - £16000 per annum: Recruitment Genius: This company was established in...
£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...
£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...
Voluntary and unpaid, reasonable expenses reimbursable: Reach Volunteering: St...