The article discusses the importance of payment-versus-payment (PvP) in the foreign exchange (FX) markets, especially in light of recent events surrounding Credit Suisse. The dominance of non-bank market makers in certain liquidity pools has changed the dynamic, with some abandoning all trading with Credit Suisse on public platforms. The use of RFQ in CLS currencies has helped the industry to take sensible risk management decisions. The article suggests that the industry needs to address the “CLS gap” and focus on developing PvP solutions, like Baton Systems, to ensure the smooth functioning of the FX market, which has seen a significant increase in trading volumes over the years.
