While the effects of high-frequency trading activity should continue to be monitored, the practice adds value to the FX market, a senior Bank of England official has argued
High-frequency trading (HFT) in foreign exchange should continue to be carefully monitored but the controversial practice adds value to the market and should not be viewed with alarm, a senior official at the Bank of England (BoE) has argued.
“Some banks and others do have strong feelings about HFT in FX, but I haven’t seen any evidence yet that it is a bad or dangerous trend. And clearly there is some value as it seems to have become part of the mechanism for moving liquidity around different trading platforms, so joining up the FX market and ensuring tighter bid-ask spreads,” says Michael Cross, head of the foreign exchange division and reserves management at the Bank of England.
To view the full story by author Joel Clark, please click here.