Today we will talk about the participants of the world Forex currency market, namely commercial banks. Commercial banks are the main participants in the global Forex currency market. They work for Forex every working day. These banks account for about a 60% of all currency transactions in the world. Even large commercial banks call «market makers», which means making a market, that is, forming a Forex market.
How Commercial Banks Operate
Commercial banks are engaged in fulfilling the applications of their clients: large exporters and importers. For example, Mercedes, which is in Europe, buys spare parts from General Motors, which is in the United States. For this purpose Mercedes needs dollars, which they will successfully buy from a large commercial bank, which in turn will buy them from some other commercial bank. Thus, we see that the global foreign exchange market is a combination of large commercial banks through electronic payment systems.
The Largest Commercial Banks In The World
On every continent and practically in every economically developed country there are representatives of large commercial banks – «market makers».
In the United States, it is JPMorgan Chase with a capital of $426 billion.
JPMorgan Chase & Co. is one of the world’s oldest, largest and best-known financial institutions. Since the foundation in New York in 1799, they have grown by meeting the needs of their customers. As a global financial services firm with operations in more than 50 countries, JPMorgan Chase & Co. combines two of the world’s premier financial brands: J.P.Morgan and Chase. The company operates in five segments: traditional banking, investment banking, commercial banking, asset management, and private equity.
Bank of America Corp. (BAC)
In the United States, another representative of «market maker» bank Bank of America with assets of $2.144 trillion.
Bank of America is headquartered in Charlotte, North Carolina. The bank’s history dates to 1904 when Amadeo Peter Giannini opened the Bank of Italy in San Francisco. It eventually developed into the Bank of America and was for a time owned by Giannini’s holding company, Transamerica Corporation. The Bank offers saving accounts, deposits, mortgage and construction loans, cash and wealth management, certificates of deposit, investment fund, credit and debit cards, insurance, mobile, and online banking services. Bank of America serves customers worldwide.
In the Germany, it is Deutsche Bank with a capital of €62.678 billion.
Deutsche Bank was founded in Berlin in 1870 as a specialist bank for financing foreign trade and promoting German exports. It subsequently played a large part in developing Germany’s industry, as its business model focused on providing finance to industrial customers. The Bank offers debt, foreign exchange, derivatives, commodities, money markets, repo and securitization, cash equities, research, equity prime services, loans, convertibles, advice on M&A and IPO’s, trade finance, retail banking, asset management, and corporate investments.
In the Germany, it is Commerzbank with assets of $532,6 billion.
Commerzbank AG, established in 1870, is a German global financial company and banking concern headquartered in Frankfurt am Main. Commerzbank attracts deposits and offers retail and commercial banking services with branches in just under 50 countries. The company has approximately 1,000 branches and offers mortgage loans, securities brokerage and asset management services, private banking, foreign exchange, and treasury services worldwide.
In the United Kingdom, it is Barclays Bank with a capital of £65.864 billion.
Barclays traces its origins back to 1690 when John Freame, a Quaker, and Thomas Gould started trading as goldsmith bankers in Lombard Street, London. The name “Barclays” became associated with the business in 1736, when Freame’s son-in-law James Barclay became a partner. It is a global financial services provider with retail banking, credit cards, wholesale banking, investment banking, wealth management, and investment management services.
In the United States, it is Citigroup with a capital of $160 billion.
Citigroup is one of the largest financial corporations in the world, created in 1998 as a result of the merger of Citicorp and Travelers Group. Citigroup has the world’s largest service network covering 160 countries. The company employs more than 300 thousand employees who manage the accounts of more than 200 million clients. It provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services and wealth management. The Company also offers various wholesale banking products and services, including fixed income and equity sales and trading, foreign exchange, prime brokerage, and equity and fixed income research services.
In the France, it is a bank Credit Agricole with assets of $1.923 trillion.
Credit in farming at the end of the 19th century In the late 19th century in France, agriculture was struggling to find suitable credit, i.e. long-term, flexible and cheap. There were several failed attempts to set up agriculture banks, including one in 1861 supported by Credit Foncier. The 1884 Act concerning professional freedom of association allowed the formation of farm unions, and together with the example of mutual banks in Germany and Italy, this created an environment conducive to the emergence of suitable banks.
In the France, it is a bank BNP Paribas with a capital of $85.4 billion.
The company was formerly known as Banque Nationale de Paris and changed its name to BNP Paribas S.A. in May 2000. BNP Paribas S.A. was founded in 1848 and is headquartered in Paris, France. BNP Paribas attracts deposits and offers commercial, retail, investment, and private and corporate banking services. The Bank also provides asset management and investment advisory services to institutions and individuals in Europe, the United States, Asia, and the emerging markets.
In the Switzerland, it is a UBS Bank with a capital of CHF 55,313 billion.
UBS was founded in 1862 as the Bank in Winterthur alongside the advent of the Swiss banking industry. During the 1890s, the Swiss Bank Corporation (SBC) was founded, forming a private banking syndicate that expanded aided by Switzerland’s international neutrality. The Bank offers products and services such as savings accounts, personal and business loans, debit and credit cards, investments, cash management, financial planning, certificate of deposits, online banking, and mortgages. UBS serves customers worldwide.
In the Hong Kong, it is HSBC Bank with a capital of $197.5 billion.
HSBC is named after its founding member, The Hong Kong and Shanghai Banking Corporation Limited, which was established in 1865 to finance the growing trade between Europe, India and China. It has a significant presence in all of the world’s major financial markets and, unusually even for a global bank, it is listed on five stock exchanges. The Company provides a variety of international banking and financial services, including retail and corporate banking, trade, trusteeship, securities, custody, capital markets, treasury, private and investment banking, and insurance. HSBC Holdings operates worldwide.
Mitsubishi UFJ Financial Group INC.
In the Japan, it is a bank of Bank of Tokyo-Mitsubishi with a capital of $14.8 billion.
Bank of Tokyo-Mitsubishi UFJ, Ltd. is the largest bank in Japan. It was established on January 1, 2006, following the merger of the Bank of Tokyo-Mitsubishi, Ltd. and UFJ Bank Ltd. The bank serves as the core retail, corporate, and investment banking arm of the Mitsubishi UFJ Financial Group. As a financial group, the Company provides a variety of financial and investment services including commercial banking, trust banking, international finance, and assets management services.
The Goldman Sachs Group INC.
In the United States, it is Goldman Sachs with a capital of $66.7 billion.
The Goldman Sachs Group, Inc. was founded in 1869 and is headquartered in the United States, New York. In 2008, Goldman reorganized itself as a financial holding company regulated by the Federal Reserve System. The Bank Holding Company is a global investment banking and securities firm specializing in investment banking, trading and principal investments, asset management and securities services. The Company provides services to corporations, financial institutions, governments, and high-net worth individuals.
In the Canada, it is Scotiabank with a capital of $49.5 billion.
The Bank of Nova Scotia was founded in 1832 and is headquartered in Toronto, Canada. The Bank of Nova Scotia is an international bank and a financial services provider in North America, Latin America, the Caribbean and Central America, and Asia-Pacific. The Bank offers a range of advice, products and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets. The Other segment includes group treasury, smaller operating segments and business line elimination items.
Royal Bank of Scotland Group PLC.
In the United Kingdom, it is Royal Bank with a capital of £49,093 billion.
Royal Bank of Scotland is a universal bank founded in 1727 and headquartered in the United Kingdom, where it derives around 90% of its total income. The bank operates a retail, commercial, and private bank in the U.K., offering clients lending and payment services as well as asset management services. The three segments combined consume about 65% of the group’s risk-weighted assets. It also provides financing, risk management, and trading solutions around the world to global financial institutions and large corporates in its NatWest markets segment.
In the United States, it is Truist Bank with a capital of $63,6 billion.
Truist Financial Corporation is an American financial holding company formed in December 2019 as a result of the merger of BB&T Corporation (Branch Banking and Trust) and SunTrust. Branch Banking and Trust Company operates as a bank. The Bank offers saving and current account, investment and financial services, online banking, mortgage and non-mortgage loan facilities, as well as issues credit card and business loans. Branch Banking and Trust serves client in the United States.
In the United States, it is U.S. Bancorp with a capital of $70,7 billion.
U.S. Bancorp is the bank holding company and parent company of U.S. Bank. The company was founded in 1863 and is headquartered in Minneapolis, Minnesota. The Company provides a full range of financial services, including lending and depository services, cash management, capital markets, and trust and investment management services. It also engages in credit card services, merchant and automated teller machine (ATM) processing, mortgage banking, insurance, brokerage and leasing. The Company’s banking subsidiary, U.S. Bank National Association, is engaged in the general banking business, principally in domestic markets. U.S. Bank National Association provides a range of products and services to individuals, businesses, institutional organizations, governmental entities and other financial institutions.
In the Switzerland, it is Credit Suisse with a capital of CHF 43,644 billion.
Credit Suisse Group AG, through its subsidiaries, provides various financial services in Switzerland, Europe, the Middle East, Africa, the Americas, and Asia Pacific. The Swiss bank is represented in more than 50 countries around the world. Is a leading global financial services company, offering clients financial advice on all aspects of private banking, investment banking and asset management. The company was founded in 1856 and is based in Zurich, Switzerland.
Other Functions Of Commercial Banks
In addition to changing the currency for their customers, major exporters and importers, commercial banks can still act as liquidity suppliers and brokerage companies enter the global Forex currency market through them. Because large commercial banks work with customers who operate millions, there is no way to become a commercial bank customer directly bypassing a broker. The use of these banks as liquidity providers for the broker is prestigious and reliable. In total, there are about 20 such large banks in the world, including those we met.