This covers a host of businesses that provide steady income and are not too capital-intensive, such as corporate cash management, foreign exchange, trade finance, global custody and hedge-fund administration.

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They lack the more sophisticated and lucrative cash-management, foreign-exchange and other services of Western peers.

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They can also use it to put controls around activities such as bank account management and foreign-exchange trades.

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Trading expert Justin Urquhart Stewart, director of Seven Investment Management says betting on movements in foreign exchange rates is notoriously volatile.

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Typically, governments hold cash reserves in their central bank as foreign exchange reserves for the purpose of stabilizing currency and management of liquidity.

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State Street fell 6.4% after the company's second-quarter earnings fell 4.5% on lower foreign-exchange trading revenue and lower fees from its investment management business.

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For example, the "Big Bang" financial deregulations include liberalizing foreign-exchange transactions, lowering securities trading costs and opening securities underwriting and investment-trust management to new players.

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