For
Immediate Release Tuesday, September 23, 2003
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“The increase in interest rate derivatives
outstanding reflects the need by market participants for risk management tools
during a period of bond market and exchange rate volatility,” said
The notional principal outstanding volume of vanilla
interest rate derivatives, consisting of interest rate swaps and options and
cross-currency swaps, grew by 24 per cent to $123.90 trillion.
Credit derivatives continued their strong growth at
25 per cent in the first six months of 2003 to $2.69 trillion, a similar rate
of growth to the previous six months. Credit derivatives, for the purposes of
the survey, consist of credit default swaps, baskets and portfolio
transactions.
Notional outstandings for
equity derivatives, consisting of equity swaps, options, and forwards, grew 14
per cent to $2.78 trillion.
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. 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. 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.
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