exchange markets was a no-brainer as the largest and most liquid market in the world.
Sat in T. Rowe Price’ s Paternoster Square offices, with the backdrop of St Paul’ s Cathedral spread out behind him, he explains that foreign exchange is the linchpin between the equity and fixed income markets.
“ If we buy an international asset at T. Rowe Price and you can ' t pay for it in the local currency, then the equity or the bond isn ' t going to settle. And so, having FX that works efficiently means that for any other asset we buy internationally- we ' re based in dollars- we would have to swap dollars into that currency to cover for the asset that we ' re buying,” he explains.
“ If that falls down, then the whole process falls down.”
What’ s more, given how liquid the FX markets are in comparison with other classes, for example equities, Baker explains that the end of the trading day is cleaner cut.
“ I like to have a clear blotter when I arrive at work and I like to have a clear blotter when I leave. Other asset classes may have to warehouse or work orders for longer.”
Tenure at T. Rowe Price Baker’ s 24-year stint at the real money asset
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