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BankNet

BankNet
More resources for national banks

Foreign Exchange

The purchase and sale of international currencies takes place in a foreign exchange (FX) market. Banks and other financial institutions make up the largest percentage of participants, who trade on the FX market for a variety of reasons, including the following:

  • Earning short-term profits from fluctuations in exchange rates
  • Protecting themselves from loss because of changes in exchange rates
  • Acquiring the foreign currency necessary to buy goods and services from other countries

See also Derivatives

Learn More

Foreign Exchange (Comptroller's Handbook – Section 813, March 1990)
Provides background and guidelines for examiners responsible for evaluating a bank's foreign exchange activities

References
BC=Banking Circular

Securities Denominated in Foreign Currencies (BC 216, September 1986)
Covers OCC policies concerning ownership of securities not denominated in U.S. dollars