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BIS: FX Derivatives Constitute 10% of Total OTC Derivatives Markets as of December 2013 

June 5, 2014
Victor Golovtchenko, Forex

The Bank of International Settlements has issued its quarterly review of international banking and financial markets services and confirmed that the foreign exchange market still maintains its second spot in the global OTC derivatives space. With the end of 2013 marking FX derivatives to constitute 10% of the total, the notional amount of foreign exchange contracts has totaled $71 trillion.

Half of the total volume was attributed to forwards and swaps, which is not a big change from previous reporting periods, however the number of currency swaps has taken the largest part. This can be partly attributed to the fact that there has been no material crisis news, and typically, longer maturity instruments have logically taken a bigger market share.

The long-term thinking that the market participants in the OTC FX derivatives space are demonstrating can also explain the lower volatility and subsequently lower volumes which we have observed lately.

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