pricing - page 7
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Wait a minute, so it turns out that only operations of those traders who ensure that there is no distortion of correspondent accounts lead to exchange rate movements? So every movement of the exchange rate is the bank balancing its correspondent account?
No, not any. In other words, it all depends on the situation. Sometimes the bank goes straight to the interbank to cover the client's order, sometimes it just balances it with other clients' orders, sometimes the bank knows in advance that there will be a big transfer and balances it with interbank swaps. Each time is different. It is an art.
Yes, but it turns out that the root accounts are some kind of buffers and the exchange rate dances with a kind of a delay.
>> That's right. And the lag time is not constant and it also fluctuates.
No, not any. To reiterate, it all depends on the SITUATION. Sometimes the bank goes straight to the interbank to cover a client's order, sometimes it just balances it with other clients' orders, sometimes the bank knows in advance that there will be a big transfer and balances it with interbank swaps. Each time is different. It is an art.
Yeah. Who does it? >> Traders? Where you can read about it. In plain language.
Yes, it would be interesting to know in more detail. A list of references would be nice too)))
You take the chief accountant of a bank with a general licence and ask him all the questions you want in a non-formal relationship
But the point is that you don't need this knowledge to work in the market, just as you don't need this knowledge about the plastic of your monitor's casing.
But the bottom line is that you don't need to know this construction to work in the market, nor do you need to know what plastic your monitor body is made of
+1 =)
RomanIgorevi4 wrote :>>
It would be interesting to know more about it. A list of references would also be useful)))
Unfortunately, part of this process is described in books on dealing proper, part is described in books on credit operations, part is described in agreements on opening and maintaining international correspondent accounts.
1. Theory and Practice of Currency Dealing - Piskulov D. Yu.
http://www.vuzlib.net/beta3/html/1/1488
2. Krakhmalev S.V. Modern banking practice of international payments. - GrossMedia, 2007.
You take the chief accountant of a bank with a general licence and ask him all the questions you are interested in in a non-formal relationship.
But the point is that the knowledge of this design for work in the marketplace on your computer, you do not need, as well as knowledge of what plastic molds the casing of your monitor
Yeah, there's no shortage of chief accountants eager to tell me about it all)))
Well, at least it's interesting.
Unfortunately, part of this process is described in books on dealing proper, part is described in books on credit operations and part is described in agreements on opening and maintenance of international correspondent accounts.
1. Theory and practice of currency dealing - Piskulov D. Yu.
http://www.vuzlib.net/beta3/html/1/1488
2. Krakhmalev S.V. Modern banking practice of international payments. - GrossMedia, 2007.
Thank you.
You take the chief accountant of a bank with a general licence and ask him all the questions you are interested in in a non-formal relationship.
But the point is that you do not need this knowledge to work at a computer in the market, as well as the knowledge of the plastic of the casing of your monitor
Wrong. Without understanding this kitchen it is impossible to understand and appreciate the mysterious RETURNS on the 3rd day after major forex movements. Where do they come from? Often because there is a DELIVERY of currency in the forex spot contract, which skews the correspondent accounts and forces other banks to buy currency in the RETURN direction.
I hope you didn't think that the banks are actually "closing" certain paired positions? Sometimes in the forums they write: "Oh! Someone closed a position!" It's funny, but even in their official messages from the big banks they glimpse "UBS Bank's FX department has closed a long position on the Euro-dollar". No such real "positions" are held by banks PRACTICALLY. All it means is that UBS lent itself some client money in EUR with 1:10 leverage, bought EUR-dollar swaps in the Interbank, put them in its accounts, rebalanced fifty correspondent accounts in the process, and probably sold a bunch more swap combinations in other currencies. This amounts to nothing more than an EXACT leverage overbalance in favour of the euro and minus dollars in the accounts of this UBS bank. For simplicity it is called a "long position". There are no "paired positions" between banks. Except for swaps (and paired correspondent accounts). But that is more complicated.
Yeah, there's no shortage of chief accountants eager to tell me all about it)))
Well, at least it's interesting.
So someone had to stop this bacchanal of speculation and crazy assumptions? That's what I decided to do.