More transparency needed in practices that drive forex trading, Norway’s wealth fund says
Oslo — Norway’s $1-trillion sovereign wealth fund is advocating for change in the way currency markets function to ensure both sides of trades have equal access to the information they need. "Forex markets are now the most liquid in the world, which is a significant achievement," the Norwegian wealth fund said in a paper published on Friday. "However, the solutions have also tended to exacerbate the informational advantages enjoyed by dealers in bilateral, over-the-counter markets." The fund, based in Oslo, says the recent release of a global code of conduct for currency markets provides an opportunity to revisit assumptions on how trades are carried out. The investor warned of the risk of "significant informational asymmetries between dealers and clients" it says ought to be addressed. While existing practices help dealers avoid price risks and contribute to liquidity, "they can also lead to excess intermediation profits and inefficient price discovery," the fund said. Currency mar...
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