Annual corporate forex volumes reach $40 trillion

The amount of foreign exchange traded by international top-tier corporates reached $40 trillion last year, according to a report by Connecticut-based Greenwich Associates. Growth was reported by the industry in every region except non-Japan Asia and Latin America.

At the same time, the volume of interest rate derivatives utilised by the same group fell by 10% to $1.4 trillion. This decline was most significant in the US, with European interest rate derivatives - 60% of the world market - flat, and Asia enjoying a 50% increase.

Both markets are still dominated by a few large institutions, the report said. In forex, 75% total volumes are traded by 10% of accounts. In interest rate derivatives, 80% is traded by 20% of users.

The report also reveals a trend of banks segmenting clients on the basis of profitability, working to the advantage of foreign exchange and interest rate derivatives customers.