© Reuters. Banks’ currency trading is trading at its highest in a decade
(Bloomberg) – Currency trading revenues in the world’s largest banks jumped to a high in a decade last quarter as the coronavirus pandemic provoked market volatility.
Exchange rate revenues at the 12 largest global investment banks rose 61% from a year earlier to $ 6.4 billion, according to Coalition Development Ltd. The windfall came as clients rushed to speculate in the market, balance portfolios and hedge positions, said Amrit Shahani, Research Director at Coalition in London.
“There was a lot of volatility that we haven’t seen in a long time,” Shahani said in an interview Wednesday.
The increased activity helped currency traders outperform their peers in other asset classes, which contributed more to bank branches dealing with fixed income, currencies and commodities, or the FICC. Currency tables now account for 28% of FICC revenue, most in a decade and up from 14% to 15% in the early 2000s, Shahani said.
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