ForeCastle

Brexit puts fintech and high-frequency trading firms in FX winners' circle

FX banks in London traditionally did very well during periods of increased volatility. Today however, with regulations crimping the amount of risk they can run and increased capital costs applied to holding those risks, banks are less likely to garner outsized gains. In an environment of increased volatility, banks tended to eventually widen their spreads and capture more profits. Today, with non-banks providing an ever-increasing amount of liquidity to the market, banks will find it tougher to pass their costs onto their clients.

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