1. The Head Office is at the core of the whole transaction business, and it not only makes external quotations, but also conducts external transactions and conducts transaction management.
2. The head office will quote the branch offices and customers. Some banks also have sales teams, and they will also make transactions with the head office on behalf of customers, so they should also quote them.
3. The quotation of the head office is obtained from the liquidity provider, that is, the "market maker", and then adjusted into its own quotation.
4. After the branch and the customer get the quotation, they will reach a deal with the head office. The foreign currency traded by the head office cannot be held in hand, which will bear the exchange rate risk, so it is necessary to sell these foreign currencies through traders. When the head office sells foreign currency, it sells the foreign currency to the "market maker", and the market maker is the liquidity provider.
It can be clearly seen from the above process that the two ends of the whole transaction are liquidity providers and end customers respectively, and the head office is in the position of "middleman" in the whole foreign exchange trading operation process, so one of its profit sources is to earn the difference. But it is not an ordinary "middleman", because it can also hold foreign currency and sell it according to market conditions, without having to hand it over to liquidity providers immediately, so its other profit source is to make positive profits through its own transactions and market judgments.