The chapters dealing with foreign exchange markets by Grilli and Roubini offer a comprehensive and valuable accomplishment and, at the same time, an agenda for further research. In my comments I will try only to highlight a few issues, rather than comprehensively taking issue with the many points of interest that invite comment. Specifically, I will briefly take up three issues: the efficiency of forex markets, the asymmetry question and volatility, including the neglected role of bid–ask spreads as indicators of market turbulence of exchange markets.

The efficiency of forex markets

The overview of foreign exchange markets in the world does well in supplying us with detailed institutional information regarding the participants and the coverage of their activities. One might ask a further question: how well do foreign exchange markets work in different locations? Foreign exchange markets operate as wholesale and as retail markets. The former must certainly operate on a highly competitive basis, with little room for discrepancies in spreads across locations, at least at those times where more than one market is open.

It would be of interest to know whether there is some hierarchy of markets: for example, Tokyo, London and New York as the world wholesale markets and Paris, Frankfurt and Melbourne (to name a few) as retail markets. And if such a structure exists, what are the margins at the wholesale and retail level? And at what transactions' levels do actors shift from retail to wholesale? And are margins the same in the wholesale market when major centres are jointly open and when only one is open for business?