ch10 (6) - Private Actors Commercial banks The key players...

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Private Actors Commercial banks The key players are foreign exchange traders, most of whom work for big commercial banks. They engage in interbank trading (all electronic) between bank accounts in different currencies. Major trading banks (% of volume) The top 5 banks account for 50% of the market. The top 10 banks account for 75% of the market. Bank deposits are the most important influence in the foreign exchange market. Private Actors Other players Major corporations (e.g., multinationals) Nonbank financial firms (e.g., mutual funds) By trading directly in the foreign exchange market, other players avoid paying fees and commissions charged by commercial banks. The volume of transactions needs to be large enough to make in- house currency trading worthwhile. Government Intervention Governments may try to control or regulate the foreign exchange market. The government may:
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This note was uploaded on 03/02/2012 for the course EC 340 taught by Professor Ballie during the Spring '10 term at Michigan State University.

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