FinanceFeeds Podcast Ep.#23: Edgewater’s Matt Kassel at the forefront of FX evolution
This episode, brimming with insights and perspectives, delves into industry trends, technological innovations, and the strategic vision of Edgewater Markets.
The 23rd episode of the FinanceFeeds Podcast shines as a captivating exploration of the evolving landscape of the foreign exchange market.
The host, Nikolai Isayev, engages in a thought-provoking conversation with Matt Kassel, the Chief Operating Officer at Edgewater Markets.
Edgewater Markets is a pioneering provider of electronic foreign exchange workflow management solutions and FX and precious metals optimization software. With a modular approach, it offers tailored technology, liquidity provisioning, and credit services, exemplified by EdgeFX.
UK FCA: Edgewater Markets secures “Cadillac of regulatory licenses”
Diving into the heart of the conversation, Nikolai congratulates Edgewater Markets on acquiring the coveted FCA license to operate in the UK. Matt shares the excitement of this achievement, portraying it as the culmination of extensive efforts over the past year. “It’s been a long time coming…we’re real excited about it,” he notes, unveiling the company’s plans to establish its three core pillars: cutting-edge technology, liquidity provision, and credit establishment.
Matt’s narrative outlines the pivotal role of these three pillars in Edgewater’s client-centric approach. The technology pillar emerges as the foundation, with the company’s custom-made solutions tailored to clients’ unique franchise needs. He cites the significance of liquidity, comparing it to a lifeline, and credits Edgewater’s historical responsibility of managing clients’ liquidity. As the conversation evolves, he delves into the third pillar of establishing credit, a challenge that gained prominence after the mid-2015 Swiss National Bank crisis.
Addressing regulatory choices in the post-Brexit era, Matt explains the rationale behind choosing the FCA in the UK. He emphasizes the FCA’s status as a stringent and internationally recognized retail regulatory body, labeling it the “Cadillac of regulatory licenses” for their business. Matt hints at the possibility of expanding coverage to the European Union in the future.
The dialogue turns towards Edgewater Markets’ recent launch of EdgeFX and credit intermediation services for Gulf Cooperation Council (GCC) currencies. Matt elaborates on this exciting development, unveiling the novel currency pairs involved, including the Saudi Riyal, Qatari Riyal, and more. He masterfully links these introductions to Edgewater’s technological prowess, showcasing their ability to pioneer such innovative solutions.
On de-dollarization and bilateral trade settlement
As the conversation evolves, the focus shifts to the broader global economic context, and the concept of de-dollarization comes to the forefront. Matt delivers a nuanced perspective, differentiating between sovereign-level de-dollarization and bilateral trade settlement using local currencies. He underscores the role of technology in this shift, highlighting how Edgewater’s technology facilitates such transformations.
Nikolai’s inquiry into the impact of ongoing economic and geopolitical factors on the FX market draws out Matt’s expertise, articulately dissecting the normalization of volatility, noting the role of central banks, interest rate hikes, and the unwinding of liquidity in this process. He highlights the rebound in fixed-income market participation and the consequent increase in volatility as a testament to this normalization. Similarly, corporate clients’ active hedging strategies reflect the agility and adaptability of businesses in navigating international exposures.
LATAM, Asia, and T+1 settlement
The podcast also delves into the intricacies of the FX markets in LATAM and Asia, shedding light on Edgewater Markets’ pioneering role in bridging the gap between onshore and offshore trading through EdgeFX. Notably, Edgewater’s impact extends beyond traditional banking clients, embracing central banks and regulators, granting them unparalleled control and oversight in an ever-evolving financial landscape.
Shifting gears, the discussion turns to the captivating concept of T+1 settlement, resonating across global financial circles. Matt’s analysis uncovers its pivotal role in credit consumption, a cornerstone of market engagement. The appeal of condensed credit periods resonates with providers seeking efficiency, yet Matt acknowledges the dual nature of this shift, potentially reducing credit fees. The global discourse surrounding the T+1 settlement stands divided, with proponents and skeptics driven by diverse reasons.
The 23rd episode of the FinanceFeeds Podcast paints a comprehensive picture of the foreign exchange market’s transformation and Edgewater Markets’ pivotal role within it.
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