The lingering effects of the corporate governance scandals, rising oil prices, and growing uncertainties about the economic consequences of a possible war in Iraq were holding back the nascent recovery from the 2001 recession. The pessimism that had gripped the business community since the summer of 2000 intensified, and firms renewed their focus on restructuring rather than expanding their operations.
It was a direct and important response to the lack of trust the foreign exchange industry had been suffering on the back of a number of instances of misconduct in the market and the associated multi-billion dollar fines. This lack of trust was evident both between participants in the market and, at least as importantly, between the public and the market.