Jason Rogers
ET Sponsor
Like many of you, I've been watching the latest developments in Cyprus. I'm glad to read forum posts from traders saying they have been able to withdraw funds from their trading accounts in Cyprus so far. One concern is that the new bailout terms might end up hurting traders even more than what was originally proposed. The new terms state that while bank accounts with balances below 100k EUR will now remain intact, accounts with balances above 100k Euros including corporate accounts could face a "haircut" of around 30% instead of the 10% that was originally proposed. That's a big hit for any business to take: http://www.nytimes.com/2013/03/25/b...-is-blow-to-business.html?pagewanted=all&_r=0
The transparency of a broker's finances, particularly how much excess capital they have on hand, is important to know in events like this to see if they can sustain the type of hit they could take as the result of a bank levy and continue normal business operations. FXCM is a publicly traded company on the NYSE and our financial information is listed on our website. As of September 30, 2012, FXCM had $230 million in our own net cash available: http://www.fxcm.com/about/financials-performance/
We have spoken at length about financial transparency needed within the forex industry so that traders can have a better idea of how much capital their broker has on hand, debt outlook, etc so traders can be better informed about the broker they are trading with. It would do a great deal to put traders at ease if companies would publish exactly how much exposure they have. How much money do they have in the affected Cyprus banks and how much is with banks outside? Do they have enough money to keep their business running even with a 30% hit to their funds in Cyprus?
Another concern we are hearing from traders is the possibility of capital controls which could restrict how much money you can withdraw especially for money leaving the country. This may be the second major topic of the crisis: http://blogs.wsj.com/eurocrisis/2013/03/25/cyprus-bailout-qa/
The transparency of a broker's finances, particularly how much excess capital they have on hand, is important to know in events like this to see if they can sustain the type of hit they could take as the result of a bank levy and continue normal business operations. FXCM is a publicly traded company on the NYSE and our financial information is listed on our website. As of September 30, 2012, FXCM had $230 million in our own net cash available: http://www.fxcm.com/about/financials-performance/
We have spoken at length about financial transparency needed within the forex industry so that traders can have a better idea of how much capital their broker has on hand, debt outlook, etc so traders can be better informed about the broker they are trading with. It would do a great deal to put traders at ease if companies would publish exactly how much exposure they have. How much money do they have in the affected Cyprus banks and how much is with banks outside? Do they have enough money to keep their business running even with a 30% hit to their funds in Cyprus?
Another concern we are hearing from traders is the possibility of capital controls which could restrict how much money you can withdraw especially for money leaving the country. This may be the second major topic of the crisis: http://blogs.wsj.com/eurocrisis/2013/03/25/cyprus-bailout-qa/
