Native liquidity pools — one by one, the innovations that so disrupted the once-clubby world of stock brokerage have been transforming the trading of foreign exchange. Ever wonder where the infamous stock market day traders of the 1990s have gone? "We've even got those now," sighs Daniel Torrey, head of North American sales at EBS, the electronic currency market operated by ICAP Electronic Broking.But although the foreign exchange market has welcomed vast numbers of new participants and electronic trading technologies continue to supplant the telephone-based dealing of old, one feature has endured: the primacy of a relatively small coterie of global banks. Last year the Bank for International Settlements' triennial survey of global currency trading found that the top market makers' collective share of orders had grown in all but a handful of the world's trading centers, continuing a long-term trend. In the U.K., by far the world's busiest currency-trading hub, accounting for 37 percent of all transactions, the combined share of the top ten market makers rose to 77 percent last year from 70 percent in 2007, the BIS says. Over the past decade the number of banks accounting for 75 percent or more of turnover has fallen roughly by half in the U.K. (to nine from 17),the U.S. (to seven from 13) and Japan (to eight from 17).
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