Chase Promotes New Derivative Product In Bid To Address FX Risk

BANKS

Chase Manhattan Bank has decided to promote a foreign exchange derivative called a contract for difference (CFD) in response to mounting pressure from regulatory authorities to reduce forex settlement risk. The bank has issued a paper that claims CFDs can eliminate as much as 95 per cent of the payments that settle the roughly $1 trillion that flows through the forex markets daily.

However, other industry sources caution that banks are too busy sorting out other operational issues to start tr