'Money Makes the World Go Round More Than Ever'

Growth of the Forex Market 

The expansion of global commerce (by over 2½ times since the 1980’s) and cross border mobility has resulted in the phenomenal, and ever accelerating, growth of the Foreign Exchange market. Growing by 20% between 2007 and 2010 alone, it now stands at over US$ 4 Trillion a Day.

 In the Right Place at the Right Time

Financial institutions, as the sole conduits for the international transfer of funds, found themselves with the vast currency flows from the integrating global economy flowing through them. This not only ballooned their capacity, but unsurprisingly their disproportionate accumulation of wealth too.

The concurrent emergence of ‘derivatives’ markets, opened the door for financial institutions to deviate from core activities, by using the vast sums at their disposal to boost revenue streams, but in so doing, bringing insecurity and uncertainty to society.
 

An Inherent Conflict of Interest!

Financial institutions, however, cannot be held responsible by society for pursuing their own agenda. Whilst they might play a critical role in society, they are self interested forces, subservient to shareholder return and have no inbuilt responsibility or allegiance to society.
 

Relieving Financial Institutions of Their Responsibility

To a certain degree, the emergence of financial institutions as the controllers and conduits of global markets has led society to lose sight of the laws underpinning markets. The laws of economics govern markets, not finance and therefore, markets can function without the participatory role of financial institutions. These structurally superior beginnings just need to be developed and steered down the right path with the political will of nations states, to relieve financial institutions of this responsibility

To read more about ‘The Institutional Market’click here.