Banks reported big drops in the revenue they earned fromcurrency trading last quarter, the Wall Street Journalreports, reflecting both a decline in volume amid a relatively calmforeign exchange market and the growth of electronic trading. Asmore market participants switch to using electronic trading, bankslose the easy profits they made from matching up buyers andsellers. And e-trading is making the foreign exchange market moretransparent and forcing banks to trim their bid-ask spread on FXtrades.
The Journal argues that the FX market's transition toe-trading will take more time than the stock market's shiftstarting in the late 1990s, though, because the FX market is moredecentralized and less regulated.
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