World leading banks to create new Forex dealing system, no more EBS?

World’s leading banks involved in currency trading are trying to regain lost ground in the forex market through the consolidated effort to launch a banks-only dealing system, according to the report by Wall Street Journal, who cited unnamed sources familiar with the case.

It is the major move taken by leading banks to regain lost ground since access to EBS, the largest forex dealing system, was opened to hedge funds and other non-banking financial players like high frequency traders in 2005, the Journal said. EBS is owned by Icap PLC (IAP.L), the interdealer broker.

The Journal reports that the new venture will be possibly dubbed Pure FX with the backing from most of the 10 largest banks in global foreign-exchange dealing.

Still, the move does not implicate any of the banks will consider leaving EBS whose FX prices are viewed as the industry benchmark, particularly in key currencies like the euro, dollar and yen, people told the paper.

The ten banks named by the Journal are Deutsche Bank AG (DBKGn.DE), UBS AG (UBSN.VX), Barclays Capital Plc (BARC.L), Citigroup Inc (C.N), Royal Bank of Scotland Group Plc (RBS.L), JPMorgan Chase & Co (JPM.N), HSBC Holdings Plc (HSBA.L), Credit Suisse Group (CSGN.VX), Goldman Sachs Group Inc (GS.N) and Morgan Stanley (MS.N).