Wednesday, December 20, 2017

BIS: OTC Derivatives Market Value Falls

The Bank for International Settlements (BIS) sent me this new article link in their regular email update. It provides the latest information they have on the OTC derivatives market. They note a significant drop in this market value.

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"In the first half of 2017, the notional amount of outstanding OTC derivatives contracts retraced its earlier decline. Notional amounts rose from $482 trillion at end-December 2016 to $542 trillion at end-June 2017, close to their level of a year earlier. In contrast, their gross market value, which provides a more meaningful measure of market and counterparty credit risk, declined further in the first half of 2017, from $15 trillion to less than $13 trillion (Graph 1). The last time the gross market value of all OTC derivatives had been below $13 trillion was end-June 2007.
Gross credit exposures, which adjust gross market values for legally enforceable bilateral netting agreements (but not for collateral), also fell to their lowest level since 2007. They declined from $3.3 trillion at end-December 2016 to $2.8 trillion at end-June 2017."

Below I have pasted in the full email update from the BIS
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