Posted on 05/13/2012 12:51:15 AM PDT by TigerLikesRooster
BIS: OTC Derivatives Market Volume Shrank In 2H 2012
LONDON (Dow Jones)--The outstanding volume of over-the-counter derivatives shrank by almost 10% in the second half of last year, according to data released Wednesday by the Bank for International Settlements.
The BIS said notional amounts outstanding fell to $647.76 trillion by the end of last year, from $706.88 trillion at the end of June, due largely to declines in the number of interest-rate swaps, credit-default swaps and equity-linked contracts.
Interest-rate swaps accounted for more than three-quarters of the total notional volumes outstanding.
At the same time, the gross market value of all contracts outstanding, which is a way of measuring what it would cost to replace those contracts, rose by 35% to $27.29 billion.
That was caused almost exclusively by changes in the market value of interest-rate swap contracts reflecting the sharp increase in European bond market volatility in the latter half of 2011 as the euro-zone debt crisis engulfed Spain and Italy, two of the world's largest issuers of bonds. The jump in gross market value was the largest since the second half of 2008, when the collapse of U.S. investment bank Lehman Brothers Holdings Inc. deepened an international credit squeeze.
(Excerpt) Read more at online.wsj.com ...
P!
I suppose we can assume that the volume of over-the-counter derivatives will continue to decline, and possibly in a manner like that of a large boulder traveling downhill - gathering speed!
Only 90% to go!
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