For Immediate Release Wednesday, September 22, 2004
For More Information Contact: Scott Marra, (212) 901-6000; smarra@isda.org
NEW YORK, WEDNESDAY, SEPTEMBER 22, 2004 – The International Swaps and Derivatives Association, Inc. (ISDA) today announced the results of its Mid-Year 2004 Market Survey of privately negotiated derivatives, demonstrating a strong increase in notional principal outstanding volumes in credit derivatives and continued steady growth in interest rate and equity derivatives.
Credit derivatives notionals grew 44 percent in the first half of 2004 to $5.44 trillion, compared with 33 percent growth reported during the second half of 2003. Credit derivatives, for the purposes of the Survey, consist of credit default swaps on single names, indices, baskets, and portfolios of credits.
Notional outstandings
in interest rate derivatives grew almost 16 percent to $164.49 trillion,
mirroring growth in the second half of 2003. Outstandings
for equity derivatives, consisting of equity swaps, options and forwards, grew
9.7 percent to $3.79 trillion. For the purposes of the Survey, interest rate
derivatives include interest rate swaps and options and cross-currency interest
rate swaps. A total of 120 firms responded to the Survey.
"The sharp growth in credit derivatives reflects the increasing utility
and application of this important product set,” said Robert Pickel, Chief
Executive Officer and Executive Director of ISDA. “Continued stable growth in
interest rate and equity derivatives also demonstrates the enduring importance
of these instruments as risk management tools.”
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. All
notional principal outstanding amounts have been adjusted for double counting
of inter-dealer transactions. All major dealers responded.
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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