World Economic News
BIS: Global Derivatives, Forex Turnover $2 Quadrillion/Year
In its new "Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity," the Bank for International Settlements (BIS) presents figures on the typical daily trading action in April 2004, based on data from 52 central banks and monetary authorities. Key findings are:
* Average daily turnover on traditional foreign exchange markets increased by 57% compared to three years ago, reaching $1.88 trillion. By far the leading country in Forex transactions is Britain ($753 billion), followed by the U.S. ($461 billion), Japan ($199 billion), Singapore ($125 billion), Germany ($118 billion), and Hong Kong ($102 billion). These country figures include some double-counting and therefore add up to more than the $1.88 trillion.
* OTC derivatives turnover has increased 112% in three years and reached $1.22 trillion per day in April 2004. Again, Britain is by far the biggest market for such transactions ($643 billion), followed by the U.S. ($355 billion) and France ($154 billion). The BIS emphasizes the ever-more prominent role of hedge funds in the OTC derivatives business. In 43% of the OTC transactions, one of the two counterparties is a non-bank (in most cases a hedge fund or an insurance firm).
* For a full year, these April figures lead to an annual turnover of roughly $500 trillion in traditional Forex transactions and $300 trillion in OTC derivatives. The annual turnover in exchange-traded derivatives, according to the latest BIS Quarterly Report, currently amounts to $1.2 quadrillion. This all adds up to an annual Forex and derivatives turnover of about $2 quadrillion. At least that's the official story.
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