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Bloomberg FX Survey Reveals Skepticism on Regulations & QE3

June 14, 2011

London – Leading foreign exchange (FX) executives say it may no
longer be valid to use inflation targeting as a factor in
monetary policy, according to sentiments reflected in the
results of a Bloomberg FX survey revealed today. The poll was
taken at Bloomberg’s FX11 Summit, which drew more than 150
portfolio managers, FX traders and executives.

“As the foreign exchange market adjusts to shifting economic
conditions, it now faces unprecedented uncertainties regarding
looming regulation,” said Tod Van Name, global head of
Bloomberg’s FX business. “We designed the Bloomberg FX11 Summit
as a conduit for conversations amongst industry leaders to share
concerns, exchange information and develop solutions to key

FX executives were asked about macroeconomic factors,
regulations and carry trade. The survey results showed:

Quantitative Easing – There will not be a third round of
quantitative easing (QE3), said nearly two-thirds (65 percent)
of those polled; while 29 percent said there would be a QE3,
possibly implying that sustained growth in most economies makes
this unnecessary

Reserve Currency – Highlighting the potential size and scope of
the Chinese economy, over two-thirds or 68 percent of those
polled agreed that the Chinese Renminbi will be a reserve
currency of the future vs. 31 percent, who said no.
Respondents, however, differed on when the Renminbi would become
a reserve currency with 32 percent saying in 5 to 10 years, 26
percent saying in more than 10 years and 10 percent saying in
less than 5 years

Regulation – Regulation can never effectively manage how
territories and domiciles are governed in their FX market
interaction, according to 66 percent of the executives polled;
only 14 percent disagreed and 20 percent said they didn’t know.
When asked if the cost of increased regulation would be greater
than the benefits, the majority or 46 percent of respondents
said yes, indicating uncertainty about the benefits of more

The Bloomberg FX11 Survey’s respondents also said that
compliance with central counterparty clearing and reporting
would be more likely to fragment risk to a greater extent. They
added that global policy makers will have a difficult time
managing a slow growth environment amid inflationary pressure.

“These survey responses paint an accurate picture of how the
global FX community sees the market today,” Van Name added.
“Bloomberg FX works with our customers to address these market
challenges by offering all the analytics, modeling and execution
capabilities they need to run their foreign exchange business in
a single, integrated desktop. We are also the only complete
commission-free execution service available in the global FX
marketplace today.”

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Media Contacts:
*Pam Snook, Bloomberg LP,,+212-617-7652
*Sophie Fischman,, +1-646-395-6300
*Charlie Morrow,,+44-20-7438-1100
*Anne Karumo,,+65-81-12-64-09