In the early days, that led to a concentration of liquidity provision amongst the largest incumbent banks, eager to grow volumes and able to afford the expensive high-speed equipment required. More recently, however, some of those firms have exited or downscaled as the scope to deliver returns from traditional business models has fallen. And a number of non-bank providers have emerged, focused less on providing balance sheet capacity to the market, and more on exploiting new technology. Taken together, this has driven a renewed dispersion of market share (Chart 2). In 2009, the number one provider in Euromoney’s annual FX survey saw nearly ten times the flows of the number ten firm. Today that ratio is just two. Chart 2: Falling concentration amongst liquidity providers  Source: Euromoney FX surveys. 3  https://www.globalfxc.org/global_index.htm, adjusting for duplicate entries reported to more than one national index. 5  All speeches are available online at www.bankofengland.co.uk/news/speeches  5  There’s been an even bigger revolution in trading platforms, as the share of trading routed through liquidity providers’ single dealer offerings and the traditionally dominant primary venues has fallen, and business has increasingly migrated towards multi-dealer platforms, which allow users to put multiple chosen providers into competition on a single site (Chart 3). Chart 3: Platform use as a share of spot FX turnover in the London market4  Source: London Foreign Exchange Joint Standing Committee surveys and Bank of England calculations.
Table 1: Key flash episodes over the past decade  Year  Asset class  Markets  Price move  Duration (minutes)*  2010  Equities  S & P 500  -6%  5  2011  FX  USD/JPY  -4%  4  2014  Bonds  US Treasuries  +37bps  5  2015  FX  EUR/CHF  -41%  20  2015  FX  NZD/JPY  -10%  10  2015  FX  USD/EUR  -2%  4  2016  FX  ZAR/USD  -9%  15  2016  FX  GBP/USD  -9%  1  2017  Bond futures  French OAT  -11bps  1  2018  FX  ZAR/USD  -9%  1  2019  FX  USD/JPY  -4%  4  2019  FX  TRY/JPY  -10%  7  Sources: Bank for International Settlements, Bank Underground, Bloomberg Finance L.P., Cielinska,O, Joseph,A, Shreyas,U, Tanner,J and Vasios,M (2017), ‘Gauging market dynamics using trade repository data: the case of the Swiss franc de-pegging’, Bank of England Financial Stability Paper No. 41, Financial Times, International Monetary Fund, MarketFactory, Inc., Nanex, Reserve Bank of Australia, Securities and Exchange Commission and Bank calculations. *Approximate time space in which price moves from prevailing price to a new low (or high) price.