Foreign exchange rules 'should be relaxed'

Banks have urged governments to relax the rules surrounding foreign exchange in a bid to boost the global economy.

Financial institutions in the Philippines have become the latest to call for a relaxation of the rules on foreign exchange so that the country is able to move closer to international standards, reports Business World Online.

However, banks across the world are keen to see more countries open up to foreign exchange so that the sector can get back on its feet after heading to the brink of collapse at the end of 2008.

Recent figures have shown foreign exchange was almost the only bright spot for banks during 2008, with the sector still providing healthy profits despite the overall downturn.

Research from Greenwich Associates found a 15 per cent jump in foreign exchange activity last year, which was half the increase of previous years.

It is hoped the decline can be halted, with more countries relaxing their foreign exchange rules in future.

The global banking sector was thrown into crisis in October last year, with several major institutions including the likes of HBOS and RBS requiring government bail-outs to prevent them from going out of business altogether.

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By Paul Jarvis