Global OTC derivatives use grew by 3% in the first half of 2000, reveals the semi-annual market survey sponsored by the International Swaps & Derivatives Association (ISDA). But among the top ten reporting institutions, volume was up 10% to $33.48 trillion.

Measured in notional principal outstanding amounts, the survey tracks market growth in interest rate swaps, interest rate options and currency swaps, as reported by member organizations. For the six months ending June 30, 2000, these totaled $60.366 trillion, compared with $58.265 trillion at the end of 1999. For the period ending June 30, 1999, the total stood at $52.711 trillion.

“These figures reflect the continuing appeal of OTC derivatives as a risk management mechanism, and demonstrate that consolidation among institutions has not slowed the growth of product use,” said Thomas K. Montag, vice-chairman of ISDA and chair of the Association’s Market Survey Committee. Mr Montag is a managing director and global head of derivatives trading at Goldman Sachs, based in Tokyo. “While the rate of growth at the top ten firms outstrips the headline figure, the results also show an increasing number of smaller member firms participating in these markets.”

The survey, which is compiled twice yearly by Arthur Andersen, is performed on a confidential basis and produces a single headline statistic. This is complemented by the more comprehensive survey produced quarterly by the Bank for International Settlements. Outstandings in the ISDA survey represent notional volumes of 100 member institutions, of which 78 were also participants in the previous semi-annual survey.

^® ISDA is a registered trademark of the International Swaps & Derivatives Association, Inc.