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, JPMorgan Chase is a $235 billion bank.
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.
Bank of America Corp. (BAC)
In the United States, another representative of «market maker» bank Bank of America with assets of 2.144 trillion dollars.
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.
In Germany it is Deutsche Bank with a capital of 62.678 billion euros.
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.
In the UK, it is a Barclays Bank with a capital of 65.864 billion pounds.
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.
In France it is a bank Credit Agricole with assets of 1.923 trillion dollars.
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.
Union Bank of Switzerland.
In 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.
In Hong Kong, it is an HSBC Bank with $197.5 billion in capital.
HSBC is named after its founding member, The Hongkong and Shanghai Banking Corporation Limited, which was established in 1865 to finance the growing trade between Europe, India and China.
Mitsubishi UFJ Financial Group.
In Japan, it is a bank of Bank of Tokyo-Mitsubishi.
The 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.
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.