Bank of England Governor Andrew Bailey said currency trading markets are vulnerable in periods of stress, but they also can serve as a buffer in a crisis.

"FX markets can still dry up in stress periods, particularly in the presence of material imbalances in currency demand."

"Exchange rates, particularly floating ones, can be important buffers against unanticipated shocks, allowing economies to adjust without more painful corrections in less flexible domestic prices."

He also said "fragmentation" in financial markets "poses daunting challenges for the unwary" in terms of finding liquidity and that complex market structures should bring more transparency.

Source : Bloomberg