Andrew Hauser: Run Lola run! The good, the bad and the ugly of FX market fragmentation - and what to do about it

Speech by Mr Andrew Hauser, Executive Director for Markets of the Bank of England, at the Tradetech FX 2019, Barcelona, 13 September 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
13 September 2019


I wonder if anyone remembers 'Run Lola Run' - a somewhat 'experimental' German film from the late 1990s? In it, the lead character runs the streets of Berlin, racing against the clock to save her hapless boyfriend Manni from a ganglord, whose money Manni has left on a train. The big idea of the film is that Lola's race is shown in three alternative realities. In the first, she secures some replacement money, but is tragically shot in a police standoff. In the second, she gets the money a different way, and repays the ganglord - but Manni gets run over by an ambulance Lola has distracted. And, in the third, Lola and Manni both secure their own money, leaving them quids in after the repayment, and living happily ever after.

What on earth does all this have to do with the FX market? I certainly draw no comparison to the handling of ill-gotten gains. But Lola's travails vividly illustrate how, in a complex world, you can get very different outcomes - good, bad or ugly - from an otherwise identical situation. And that's a powerful metaphor for today's FX markets.