Why aren't Big Banks jumping in on forex? | Forex Factory

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Why aren't Big Banks jumping in on forex?

  • #1
  • First Post: Mar 31, 2007 11:39pm Mar 31, 2007 11:39pm
Im a little bit confused on this issue about reliable brokers. Here we have almost 2 trillion dollars moving daily. And soo many different brokers out there where everyone questions their credibility. And even after we join, we still question if our money is safe.

Why aren't big banks getting into this retail market of forex. I see Deutche Bank (Platform is not great!) and ABN Amro (Must live in Germany or Austria). Are there others I dont know about?

So what happens when we go into the 100's and millions of $! Who do we trust?
  • #2
  • Mar 31, 2007 11:50pm Mar 31, 2007 11:50pm
Quoting faboualfa
Im a little bit confused on this issue about reliable brokers. Here we have almost 2 trillion dollars moving daily. And soo many different brokers out there where everyone questions their credibility. And even after we join, we still question if our money is safe.

Why aren't big banks getting into this retail market of forex. I see Deutche Bank (Platform is not great!) and ABN Amro (Must live in Germany or Austria). Are there others I dont know about?

So what happens when we go into the 100's and millions of $! Who do we trust?
When your dealing with that kind of money you don't have to trade on margin. You can negotiate credit lines and only keep settlement funds with your broker.
  • #3
  • Apr 1, 2007 12:32am Apr 1, 2007 12:32am
Also, banks do what they called "Bank Sweeps". They take money from certain accounts and place it into the forex market over night, then replace the used funds back into the account. Banks are the biggest rip off. They make millions on your money without your consent, but give you small returns on money you invest for "cd's, money management funds, etc"
  • #4
  • Apr 1, 2007 12:47am Apr 1, 2007 12:47am
Thankyou for your responses.

Now what Im trying to figure out, is that when money starts to grow in the 100,000, where would one decide to take their money?
  • #5
  • Apr 1, 2007 3:41am Apr 1, 2007 3:41am
Quoting faboualfa
Im a little bit confused on this issue about reliable brokers. Here we have almost 2 trillion dollars moving daily. And soo many different brokers out there where everyone questions their credibility. And even after we join, we still question if our money is safe.

Why aren't big banks getting into this retail market of forex. I see Deutche Bank (Platform is not great!) and ABN Amro (Must live in Germany or Austria). Are there others I dont know about?

So what happens when we go into the 100's and millions of $! Who do we trust?
I believe you're asking the question, why don't banks allow retail brokers like us to trade with them instead of us having to use the brokers? If so, then the answer is simple.

The retail side of FX is very small. So small, the banks don't need to acknowledge us. ECN's are a step up from brokers in that they give smaller traders access to SOME banks that participate in the ECN. As mentioned above, if you have lots of money, you go straight to the bank and open a credit line.

Banks really couldn't be bothered with 2,000 customers with $1,000 accounts wondering why the bank is hunting their stops. Consider this, in 1999, if I remember correctly, Citibank lost $300 million of their own money trading FX, but made $600 million in commissions trading for their clients. That's big money.
  • #6
  • Apr 1, 2007 7:27am Apr 1, 2007 7:27am
There was an article recently on euromoney, on how the banks are getting more interested in the retail crowd. They said it is roumored that there are some more banks planning whitelable partnerships ala ABN or DB.
  • #7
  • Apr 1, 2007 8:14am Apr 1, 2007 8:14am
banks don't allow reatil traders to trade with them beacuse our account's or to small they rather clear your trades with your retail broker, examlpe fxcm does 150 billion a month they rather get the volume from your retail broker instead of haveing to put up with all those small accounts, so they just get the volume from your broker much cheaper that way. thats if your broker offset your trade with the bank instead holding your postions hoping you loose.
If I Go Broke Trying Then I Will die happy.
  • #8
  • Apr 1, 2007 10:35pm Apr 1, 2007 10:35pm
Quoting DollaBill
Also, banks do what they called "Bank Sweeps". They take money from certain accounts and place it into the forex market over night, then replace the used funds back into the account. Banks are the biggest rip off. They make millions on your money without your consent, but give you small returns on money you invest for "cd's, money management funds, etc"
I'm not sure why is that wrong ? When you keep your money with the bank's fixed-deposit, you expect them to pay you the promised annual interest. What's wrong with using your money to make profit as long as they honor your expectation to pay the interest ?

Where's the rip-off ? How can anyone claim they have been ripped-off when they actually profit 4% a year as advertised ?
  • #9
  • Apr 1, 2007 11:09pm Apr 1, 2007 11:09pm
If I understand DollaBill correctly, the point is that banks engage in high-risk transactions with your money and expect the FDIC to bail them out, which you eventually pay for yourself. If we engage in something high-risk, we simply lose the money. Now if that scenario is fine with you...
  • #10
  • Apr 2, 2007 12:30am Apr 2, 2007 12:30am
Quoting zuijlen
If I understand DollaBill correctly, the point is that banks engage in high-risk transactions with your money and expect the FDIC to bail them out, which you eventually pay for yourself. If we engage in something high-risk, we simply lose the money. Now if that scenario is fine with you...
How does FDIC bail them out ? Tax-payer money ?
How frequent does FDIC bails those banks out ?
  • #11
  • Last Post: Apr 2, 2007 3:31am Apr 2, 2007 3:31am
I'm not sure but aren't brokers connected to forex thru banks? This way they offer this very high leverages.
"Abandon all hope, you who enter here" La Divina Commedia, Dante Alighieri
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