Forex Q-WHy London?

[bullboy8]

A recent BIS publication notes that 36.7 of glogal foreign exchange turnover comes through the UK. What exactly does it mean by the words "comes through?" I thought banks would trade with other banks/financial institutions (hedge funds, fund managers) directly. Why do they need to go through the uk? We don't provide the clearing as it is OTC?

talking about clearing, what is exactly involved? For example, I sell shares held with my broker in their custodian account, it is sent to the clearing to be past onto whoever bought the shares I sold?

Thanks

 

[GammaJammer]

Meaning the price has been made by an institution (not necessarily a bank these days) in London. London, for various historic reasons especially timezone is, and always has been the world's pre-emminent centre for FX trading. Doesn't mean there are no FX traders anywhere else of course, just that London has always been a major major centre for the banks' FX operations and there is a large and diverse community of professional wholesale market participants here (so hiring for example is more straightforward as the, ahem, 'talent' pool is already here).

Timezone wise London straddles Asain, European and NY days in a particularly propitious way, and the regulatory environment is also relatively benign.

In short it's one of the things the financial district here does best.

 

[supremegizmo]

The time zone of london is a prominent feature / ofcourse the liquidity and the flow of fx does move the markets as european participants kick in..