For
Immediate Release Thursday, April 1, 2004
For More Information, Please Contact:
ISDA AGM Press Room, The
Louise Marshall, ISDA New York,
212-901-6000, lmarshall@isda.org
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"The strong growth exhibited in the OTC derivatives markets clearly
underscores the benefits these products provide as financial risk management
tools," said Robert Pickel, Chief Executive Officer and Executive Director
of ISDA. "Furthermore, the accelerated growth of both the credit and the
equity derivatives markets demonstrates the value they provide firms seeking to
transfer these types of risk."
Credit derivatives, in contrast, grew at a stronger rate in the second half (33
percent) than in the preceding six months (25 percent); notional amounts now
stand at $3.58 trillion. This represents a year-over-year growth of 29 percent.
Credit derivatives, for the purposes of the Survey, consist of credit default
swaps, baskets and portfolio transactions.
Finally, notional outstandings for equity
derivatives, consisting of equity swaps, options, and forwards, grew 24 per
cent, compared with 14 percent in the first half. Notionals
now stand at $3.44 trillion. This represents year-over-year growth of 21%.
The notional principal outstanding volume of interest rate derivatives, which
include interest rate swaps and options and cross-currency swaps, grew by 15
per cent to $142.31 trillion. This is a slower rate of growth than in the first
half of 2003, during which interest rate derivatives grew by 24 percent. This
represents a year-over-year growth of 14 percent.
The survey records notional outstanding volumes for all products covered, i.e.,
notional amounts of business transacted in relation to the underlying asset,
versus the net exposures participants have to one another after conducting
offsetting transactions and other credit risk mitigation techniques, such as
netting. ISDA surveys its Primary Membership twice yearly on a confidential
basis. In this survey, 120 firms provided data on interest rate swaps; 100
provided responses on credit derivatives; and 106 provided responses on equity
derivatives. Although participation in the Survey is voluntary, all major
dealers provided responses. All notional principal outstanding amounts have
been adjusted for double counting of inter-dealer transactions. ISDA published
a survey on March 31st highlighting counterpart credit exposures
among the largest dealer firms.
For further detail on the ISDA Market Survey methodology, please see www.isda.org/statistics/index.html.
About ISDA
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
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