Commercial banksconduct the main volume of exchange transactions. Other participants of the market have their accounts at the banks, conducting necessary conversion transactions. Banks accumulate the combined needs of the market in exchange conversions as well as in calling and distributing money, breaking with it into new banks. Besides satisfying clients’ requests, banks can operate independently, using their own assets. A forex market is a market of interbank dealings, and one should bear in mind the existence of an interbank foreign exchange market. In international forex markets, international banks with the daily volume of transactions of billions dollars have the biggest influence. These are Barclays Bank, Citibank, Chase Manhattan Bank, Deutsche Bank, Swiss Bank Corporation, Union Bank of Switzerland, etc.

Exchange markets. Exchange markets do not work in a definite building and they do not have definite business hours. Thanks to the development of telecommunications most of the leading financial institutions of the world use services of exchange markets directly and via mediators 24 hours a day. The biggest international exchange markets are based in London, New York and Tokyo. In some transitional economies there are exchange markets for currency exchange by juristic persons and for forming a market exchange rate. The state usually regulates the exchange rate in an active manner, using the compactness of the exchange market.

Central banks control currency reserves, realize interventions, and regulate the interest rate in the national currency. The central bank of the U.S., the US Federal Reserve Bank, or «FED», has the greatest influence in the international exchange markets. It is followed by the central banks of Germany (the Deutsche Bundesbank or BUBA) and of Great Britain (the Bank of England, nicknamed the «Old Lady»).

Firms that conduct foreign trade transactions. Companies participating in international trade have a stable demand for foreign currency (importers) and supply (exporters). These organizations do not have direct access to exchange markets, and they conduct their conversion and deposit transactions via commercial banks.

Investment funds represented by various international investment, pension, and mutual funds, insurance companies, and trusts, realize the policy of diversified portfolio management by placing their money in government or corporate securities. The fund Quantum owned by George Soros executes successful exchange speculations. Big MNCs, such as Xerox, Nestle, GM that make FDI, also are firms of this kind.

Broker companies bring together a buyer and a seller of foreign currency and conduct a conversion dealing between them for a broker’s fee. In the forex market there is no fee as a percent from the sum of a transaction, or as a sum agreed in advance. Usually broker companies quote currency with a spread, which includes their fee. A broker company is a place where the real exchange rate is formed according to closed deals. The biggest international broker companies are Lasser Marshall, Harlow Butler, Tullett and Tokio, Coutts, and Tradition.

Private persons. Natural persons realize a wide range of non-commercial transactions in the sphere of foreign tourism, transfers of salaries, pensions, royalties, buying and selling foreign currency.

Source: www.pro.forex.com