Apart from being the largest market in the world in terms of cash value traded, the foreign exchange market has also been the most opaque in terms of price discovery. Foreign exchange was traditionally dominated by large FX dealer banks, which controlled lines of credit. But the days of phone-wielding traders are numbered because new technology, methodology, and ideology have emerged to vitalize the FX markets. This TowerGroup Research Note profiles the three types of third-party electronic execution venues in the FX market: interdealer portals, multibank portals, and the exchange-model electronic communication networks (ECNs) and discusses their prospects for the future.
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