Growth in derivatives trading speeds up, says BIS

Trading on international derivatives exchanges has continued to pick up pace, according to the latest Bank for International Settlements (BIS) Quarterly Review, which was released today. The combined turnover in interest rate, equity and currency derivatives rose by a quarter between January and March 2006 to $429 trillion. However, the growth of credit default swaps (CDSs) trades slowed.

Trading in interest rate products grew by 26% in the first quarter amid expectations for higher interest rates in the US and Japan. Uncertainty over the timing of US interest rate rises caused a 38% increase in the trading of short-term US interest rates. Turnover in futures and options on 30-day federal funds doubled to $36 trillion in the first quarter, while open interest in these contracts rose 70% to $12 trillion.Elsewhere, the ending of the Bank of Japan’s quantitative easing policy in

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