Foreign exchange markets started last year where they left off in 2008 – reeling from the collapse of Lehman Brothers. Currency volatility hovered at elevated levels, liquidity in long-dated options on certain currency pairs was scarce, and concerns over counterparty risk remained high on the agenda for both dealers and clients.
End-users say a number of banks pulled back from the market in the fourth quarter of 2008 and into 2009, particularly in options markets. Only a small band of three or f
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