London's forex trade is $637bn a day

LONDON HAS maintained its lead as the world's premier market for foreign exchange and over-the-counter derivatives, according to new figures compiled by the Bank of England.
The figures show that the average daily turnover of the UK foreign exchange market was $637bn per day in April, an increase of 37 per cent on the same month three years ago.
The daily turnover in over-the- counter derivatives was $171bn in the UK in April, almost twice the level of the United States, which ranked second in the survey. The UK figure showed a 131 per cent rise over the past three years as London stretched its lead on rival financial centres.
The Bank of England stressed that the derivatives figures were for "off exchange" transactions between institutions and that trading on exchanges such as LIFFE could be as much as "10 times those figures."
However, London's leading position makes the Square Mile more exposed than any other financial centre given the recent turmoil in financial markets caused by hedge funds such as Long Term Capital Management.
The Bank of England refused to comment on the actions of hedge funds and how they might be regulated in the future. John Footman, the Bank's deputy director of financial stability, said: "I don't want to offer any prescription on that. That will be one of the issues that will be raised in Washington next week [at the International Monetary Fund and World Bank meetings]."