At the beginning of this module you learned that the majority of the interbank commerce takes control of the dollar. But we suppose that a client of the bank wants to change of pounds sterling to Swiss francs directly. In the slang of the runner, this commerce ” no” dollar denominates ” it descries against divisa”. The bank generally (or indeed) handles to this transaction for its client selling pounds sterling by the dollars of the EE.UU and soon it will be sold the dollars of EE.UU by the Swiss francs. It does not seem this ridiculous situation! Why not to sell the British pound directly by the Swiss francs? I have why to do it this way here. $US Euro watches the table of down Changes Main Cruzados Pound Sfranc Peso Yen CdnDlr Canada 1,2442 1,6315 2,3736 1,0539 0,1119 0,0118 Japan 105,2900 138,0500 200,8500 89,1770 9,4690 84,6180 Mexico 11,1185 14,5786 21,2110 9,4174 0,1056 8,9360 Switzerland 1,1806 1,5481 2,2523 0,1062 0,0112 0,9489 UK 0,5242 0,6873 0,4440 0,0472 0,0050 0,4213 Euro 0,7627 1,4549 0,6460 0,0686 0.0072 0.6130 $US 1,3112 1,9077 0,8470 0,0899 0,0095 0,8037 Source: The Wall Street Journal, March 2005 Imagine that the currency of origin of a bank was one of the seven previous currencies and that each deals in the other six currencies.

The Office of the bank will be organized in six tables of negotiation, each to deal currencies in front of the dollar of EE.UU. and each runner only works creating a currency market not-been in front of the American dollar. But each one of the seven currencies negotiate directly with the others, the negotiation office must have 21 tables of negotiation. Or worse still, the individual runners will be responsible to make a market in several pairs of currencies, for example, USD/EUR, EUR/GBP, EUR/CHF, instead of only EUR/USD. According to Grabbe (1996) this would be a information overload that would be impossible to handle. The banks can interchange a currency by commercial currencies, for example, a client of a bank that interchanges pounds sterling by Swiss francs (CHF), in cross rate desk desktop type. And, the S (CHF/GBP) Quotes can derivatives of S (USD/GBP) XS (CHF/USD).