Hello Everyone,
As everyone knows by now, the subprime mortage crisis is the main cause behind the credit crunch the markets are facing now. Banks around the world are not trusting each other enough to lend each other and the overnight lending rates have shot up which called for the direct intervention of central banks worldwide.
My question is, how would the credit crunch affect the FOREX brokerage firms? Espeicall that almost all of them do not have any credit ratings.
I don't know the business model of a forex broker but I think that some of them are market makers and in order for them to act in that role they need liquidity which I assume is provided by banks in a lending basis.
As everyone knows by now, the subprime mortage crisis is the main cause behind the credit crunch the markets are facing now. Banks around the world are not trusting each other enough to lend each other and the overnight lending rates have shot up which called for the direct intervention of central banks worldwide.
My question is, how would the credit crunch affect the FOREX brokerage firms? Espeicall that almost all of them do not have any credit ratings.
I don't know the business model of a forex broker but I think that some of them are market makers and in order for them to act in that role they need liquidity which I assume is provided by banks in a lending basis.
Today is the first day of the rest of my life