BIS announces 135% notional OTC derivatives growth since 2004

According to the Bank for International Settlements' (BIS) latest reports, notional amounts outstanding for over-the-counter (OTC) derivatives increased by 135% to $516 trillion from June 2004 to June 2007.

This corresponds to an annualised compounded rate of growth of 33%. This is higher than the approximate 20% average annual rate of increase since positions in OTC derivatives were first surveyed by the BIS in 1995.

The organisation noted particularly rapid growth in the credit segment, where positions in credit derivatives increased more than tenfold to $51 trillion. Credit default swaps (CDSs) were the most dominant instrument in this category, accounting for 88% of positions in credit derivatives.

Activity in the OTC derivatives market accelerated in the first half of 2007, with notional amounts outstanding for all types of OTC contracts increasing by 25%, following a 12% increase in the second half of 2006.

These results are from the second part of the BIS Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity, as well as its regular twice-yearly OTC derivatives statistics.

See also:
Isda and BIS surveys highlight market growth
Latin American securitisation thrives