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Key Trends in the Size and Composition of OTC Derivatives Markets in the Second Half of 2022

Research
Research Notes June 15, 2023
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The latest data from the Bank for International Settlements (BIS) over-the-counter (OTC) derivatives statistics shows a significant increase in gross market value and gross credit exposure of OTC derivatives during the second half of 2022 compared to the second half of 2021. The growth was driven by higher interest rate derivatives (IRD) market value following increases in interest rates for key currencies in 2022.

The gross market value of OTC derivatives contracts rose by 66.8% at year-end 2022 compared to the end of 2021. Gross credit exposure – gross market value after netting – grew by 44.9%. Global OTC derivatives notional outstanding increased by 3.3% at year-end 2022 compared to year-end 2021.

Market participants reduced their total mark-to-market exposure by 82.3% at year-end 2022 due to close-out netting. Credit exposure was further reduced by the collateral that market participants posted for cleared and non-cleared derivatives transactions.

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