ZURICH/LONDON, May 24 - Swiss bank UBS has lost ground to rivals in the $4 trillion a day forex market after technology spending cuts during the financial crisis left the bank's trading systems trailing those of competitors.
This has left UBS fighting to maintain its grip on one of the fastest-growing and high-margin segments of the market, according to several clients and insiders, even though its highly prized forex division remains dominant in other areas.
"UBS is the top player in forex swaps, a low-margin business, but it continues to lose ground in the higher-margin spot market," said an industry expert with 20 years experience in forex brokerage and trading.
The spot market grew almost 50 percent to $1.5 trillion a day between 2007 and 2010. Swaps, which are trades in the difference between the spot rate and the forward rate, grew just 8 percent to $2.3 trillion, data from the Bank for International Settlements show.
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