The Banque de France (BdF) has increased its use of algorithms for executing foreign exchange trades, according to its most recent annual report. The French central bank notes that over 60% of trades are now handled on an electronic platform, of which 20% are executed using algorithms. The 2017 annual report explains that in order to increase its operational efficiency, the Banque de France has been actively modernising its trading infrastructure in the foreign exchange market. “These innovative trading tools ensure optimal transaction execution for the Bank’s proprietary and client orders, all at the best possible cost and with minimal impact on the market,” the report says.
In June, the French central bank announced it would be further developing these capabilities by deploying Quod Financial’s adaptive FX platform (QFX). According to the bank, this new platform will provide a set of algorithms to seek liquidity and manage market impact, with total control over the execution. In addition, the QFX real-time analytical tool will further enable BdF’s in-depth understanding of liquidity and participants activity on both a single order and an aggregate level.
“Banque de France is a technology innovator and the logic of this project is to stay ahead of the rapid changes in the capital markets,” says Mickael Rouillère, chief technology officer, Quod Financial. “Banque de France wants full control on how it provides liquidity to the market, with minimal information leakage and powerful surveillance tools coupled with the ability to analyse events.”