Financial intermediation and the role of price discrimination in a two-tier market /
Though unambiguously outperforming all other financial markets in terms of liquidity, foreign exchange trading is still performed in opaque and decentralized markets. In particular, the two-tier market structure consisting of a customer segment and an interdealer segment to which only market makers...
| Main Author: | |
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| Other Authors: | , |
| Format: | Book |
| Language: | English |
| Published: |
Frankfurt am Main :
Deutsche Bundesbank,
2009
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| Series: | Discussion paper (Deutsche Bundesbank). Series 1: economic studies
no. 13/2009 |
| Subjects: | |
| Online Access: | https://www.econstor.eu/bitstream/10419/27667/1/200913dkp.pdf |
MARC
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| 100 | 1 | |9 5350 |a Reitz, Stefan | |
| 245 | 1 | 0 | |a Financial intermediation and the role of price discrimination in a two-tier market / |c Stefan Reitz, Markus A. Schmidt, Mark P. Taylor. |
| 260 | |a Frankfurt am Main : |b Deutsche Bundesbank, |c 2009 | ||
| 300 | |a 27 p. | ||
| 490 | 1 | |a Discussion paper. Series 1: economic studies ; |v no. 13/2009 | |
| 504 | |a Bibliografía: p. 18-20. | ||
| 520 | 3 | |a Though unambiguously outperforming all other financial markets in terms of liquidity, foreign exchange trading is still performed in opaque and decentralized markets. In particular, the two-tier market structure consisting of a customer segment and an interdealer segment to which only market makers have access gives rise to the possibility of price discrimination. We provide a theoretical foreign exchange pricing model that accounts for market power considerations and analyze a database of the trades of a German market maker and his cross section of end-user customers. We find that the market maker generally exerts low bargaining power vis-á-vis his customers. The dealer earns lower average spreads on trades with financial customers than commercial customers, even though the former are perceived to convey exchange-rate-relevant information. From this perspective, it appears that market makers provide interdealer market liquidity to end-user customers with cross-sectionally differing spreads. | |
| 650 | 4 | |9 3394 |a INTERMEDIACION FINANCIERA | |
| 650 | 4 | |a ESTRUCTURA DEL MERCADO |9 5134 | |
| 650 | 4 | |9 8079 |a DISCRIMINACION DE PRECIOS | |
| 650 | 4 | |a TIPO DE CAMBIO |9 494 | |
| 651 | 4 | |a ALEMANIA |9 178 | |
| 653 | 4 | |a DESINTERMEDIACION FINANCIERA | |
| 653 | 4 | |a CAMBIO EXTERIOR | |
| 700 | 1 | |9 5691 |a Schmidt, Markus A. | |
| 700 | 1 | |9 1679 |a Taylor, Mark P. | |
| 830 | 0 | |9 4690 |a Discussion paper (Deutsche Bundesbank). |p Series 1: economic studies |v no. 13/2009 | |
| 856 | 4 | |u https://www.econstor.eu/bitstream/10419/27667/1/200913dkp.pdf | |
| 942 | |2 ddc |c DOCU |j F 338.52 R 15687 | ||
| 945 | |a BEA |c 2016-11-14 | ||