Banque de France highlights Paris's FX market concentration in BIS survey
The Banque de France has published findings from the triennial Bank for International Settlements (BIS) survey, revealing a significant concentration in Paris's foreign exchange and OTC derivatives market. The survey, based on April 2025 data, highlights shifts in transaction maturities and institutional reliance.
Paris's FX market: Shorter maturities, larger players
For France, the survey highlighted a significant reduction in transaction maturities, with nearly two-thirds of trades maturing in under seven days.
This shift coincided with increased reliance on major banking institutions; the five largest Paris-based players now account for over 90 percent of total turnover, up from 86 percent in 2022. This growth was primarily driven by cross-border transactions.
Globally, banks remained the main counterparties (77 percent), followed by non-financial customers and other financial institutions (both 11 percent).
While electronic trading platforms saw rising use, some sensitive trades were still executed via 'voice' transactions for enhanced security during high volatility.
FX swaps define European markets, spot drives global growth
FX swaps remained the most important instrument in France, constituting 74 percent of transactions in April 2025, significantly higher than the global average of 4 percent.
This European specificity likely reflects regional customers' greater exposure to foreign currency-denominated securities, increasing their need for FX risk hedges.
Globally, FX spot and forward contracts were the predominant drivers of turnover growth.
Spot turnover, reaching nearly USD 3,700 billion, was driven by commercial factors like front-loading trade and financial considerations such as unwinding unhedged dollar positions and speculative trading amidst heightened volatility.
Paris consolidates, Europe hedges
The survey confirms Paris's role as a concentrated hub, driven by institutional players and short-term hedging.
Europe's distinct reliance on FX swaps highlights a specialized regional risk management profile, contrasting with global spot market growth.
This indicates a mature market structure prioritizing stability over speculative expansion.