ISDA®
INTERNATIONAL
SWAPS AND DERIVATIVES ASSOCIATION
NEWS RELEASE
For
Immediate Release Wednesday, March 19, 2003 For More
Information, Please Contact: ISDA 2002
Year-end Market Survey
Credit default swaps
pass $2 trillion; plain vanilla swaps close to $100 trillion
Credit derivatives growth
was the strongest of the three main product categories at more than 37% in
the six months prior to year-end 2002. Total notional outstanding volume in
this area grew to $2.15 trillion. Notional outstanding volume in interest
rate and currency derivatives, or ‘plain vanilla’ swaps and options totaled
$99.83 trillion, an increase of just over 20%, while the figure for equity
derivatives outstanding amounts grew to $2.45 trillion, a 5.8% increase. A record number of ISDA member firms
responded to the Survey, with 108 out of 201 primary members globally
providing data. “The continued pace of
growth in the OTC derivatives markets during times of economic and political
uncertainty demonstrates their importance as a mechanism for mitigation and
dispersion of the risks our members encounter in the course of their
business,” said Bob Pickel, Executive Director and Chief Executive Officer of
ISDA. “The acceleration in use of credit derivatives in particular is
testimony to the effectiveness of this product set in the redistribution of
credit exposures to those firms desirous of adopting them.” Interest rate and
currency derivatives, which consist of interest rate swaps and options and
currency swaps, increased over 20.66% in the last six months of 2002, which
mirrors the increase among the top ten reporting firms at 20.68% growth.
Among firms responding to both the Mid-year and Year-end Surveys, outstandings grew by 19.2%. Credit derivatives, which
consist of credit default swaps, baskets and portfolio transactions, grew
37.42% since the end of June 2002; among firms responding to both surveys,
outstanding volumes grew 34.68%.
Equity derivatives, which consist of equity forwards, swaps, and
options, grew by 5.78%, as against 2.48% for those firms who responded to
both surveys. ISDA
surveys its Primary Membership twice yearly and the Market Survey is
performed on a confidential basis. All notional principal outstanding amounts
have been adjusted for double-counting of inter-dealer transactions; in
addition, some growth in the results comes from growth in the number of firms
responding. In this Survey, 107 firms
provided data on interest rate and currency swaps; 97 on credit default swaps,
and 94 on equity swaps. The ISDA numbers complement the more comprehensive
surveys published periodically by the Bank for International Settlements
(www.bis.org). For further detail on
the ISDA Market Survey methodology, please see www.isda.org/statistics/index.html. ISDA is the global trade association representing
leading participants in the privately negotiated derivatives industry. ISDA
was chartered in 1985, and today has more than 600 member institutions from 46 countries on six
continents. These members include most of the world's major
institutions that deal in privately negotiated derivatives, as well as many
of the businesses, governmental entities and other end users that rely on
over-the-counter derivatives to manage efficiently the financial market risks
inherent in their core economic activities.
Information about ISDA and its activities is available on the
Association's web site: www.isda.org. ### |