For the first point I agree. In this person's case it is more extreme. I don't know what capacity your involved in sell side trading but I'll share some cases I

For the first point I agree. In this person's case it is more extreme. I don't know what capacity your involved in sell side trading but I'll share some cases I've seen in case anyone else reading is curious as well. For rmb, krw, and a lot of Asian currencies in general there is an onshore and offshore market. A lot of the times both onshore and offshore books are managed by the same team. This creates two tradable currencies which should theoretically move in lockstep and some corporates have capacity to arbitrage/move currency across border. A common strategy is to simply bet that their spread converges when some technical factor like a large trade going through moves one market more than the other. Hardly nefarious but exists because of regulatory reasons and hardly rocket science. The problem happens when currency trends strongly in one direction in which case one book has massive losses and the bank ceo of that branch is not happy. Or when the onshore/offshore team starts trying to claim a stake of the profits because their resources/credit lines are being utilized. A lot of bickering and politics then ensues. Another case, in China, regulation requires long usdcny fx forwards to be accompanied with an extra 300bp charge to stop cny depreciation. Option structure only require half the charge. A lot of the desk pnl is essentially made from selling synthetic forwards structured from calls. Similarly a large part of the hybrid structured business in general is because some insurance/pension funds are only allowed to trade bonds but want fx/equity exposure. For 2, from my experience it really is ripping off most of the time. The exception is when a client comes in with an order much larger than what the market can digest quickly. This usually requires a mixture of luck, skill, and balls to avoid it blowing up in your face and is one of the rare times I think traders really are doing their job. However these trades don't come too often