"The interbank
market is a market for Banks. Small and mediumsized clients of Banks cannot
directly participate in the interbank market. If a Bank is a member of a
currency futures exchange, it can trade on behalf of its small and medium-sized
clients, who otherwise would not have been able to benefit from fluctuations in
currency exchange rates. Thus, Banks can increase their customer base if they
become a member of a currency futures exchange. Banks themselves can also
benefit from a currency futures exchange by arbitraging between the existing
interbank market and the currency futures exchange. Larger participation in a
currency futures exchange gives the exchange platform a greater vibrancy than
the interbank market, which is limited to Banks."
