Back in the 1980 presidential campaign, Ronald Reagan used this phrase to great effect to fend off criticism that was untrue or exaggerated. Today, it’s a phrase we think about saying often, particularly when it comes to news reports about the OCC’s Quarterly Report on Bank Trading and Derivatives Activities.
The 2011 second quarter edition is just out and, as usual, it’s creating some misperceptions that need to be clarified. The New York Times, for example, reported on it and said that “The nation’s four biggest banks… are the biggest players, holding roughly 95 percent of the industry’s total exposure to derivatives.”
As we’ve noted in the past, the OCC report only covers part of the US market. The data includes derivatives exposures of US dealers and US subsidiaries of non-US dealers. But it does not include exposures arising from transactions between a US firm and a non-US dealer.
Even more importantly, the OTC derivatives market is global, with competitors from all geographic sectors. On a global basis, the five largest US-based dealers held 37 percent of total derivatives notional according to an analysis ISDA did last year. The G14 group of dealers (the 14 largest) held 82 percent of total notionals outstanding.
The depth and breadth of competition in OTC derivatives is also supported by data from SwapClear, which requires members to have at least $1 trillion in notional outstanding. There are at last count 38 separate dealer/members who meet this criterion.
This leads us to ask: which other global markets have as many firms competing for business as this one?
Latest
Trading Book Capital: Scott O'Malia Remarks
Trading Book Capital: Capital Conundrum, Navigating Basel III Endgame February 5, 2026 Welcoming Remarks Scott O’Malia, ISDA Chief Executive Good afternoon, and welcome to ISDA’s Trading Book Capital event – it’s great to be here in New York. We...
ISDA In Review – January 2026
A compendium of links to new documents, research papers, press releases and comment letters published by ISDA in January 2026.
ISDA Responds to RBI Unique Transaction Identifier (UTI) Proposals
On November 14, 2025, ISDA submitted comments to a Draft Circular from the Reserve Bank of India (RBI) proposing to mandate the global Unique Transaction Identifier (UTI) for all transactions in OTC markets for Rupee interest rate derivatives, forward contracts in Government...
How and Why Pension Funds Use Derivatives
With over $58 trillion in assets globally, pension fund managers are major participants in financial markets and play a vital role in helping to provide post-retirement incomes for plan employees. Meeting such an important goal requires careful consideration of investment...
