Dealers have the last word on derivatives notionals

Compression is the ultimate retort to those who equate notionals with exposure

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In the post-crisis years, dealers have been trying to convince the world that notional is a terrible way to measure the risk of derivatives markets. It has been a valiant, dogged campaign – on this occasion the industry is right, and knows it.

It is also futile. The notional number – $691 trillion according to the latest Bank for International Settlements survey – is big and scary, making it ideal for journalists and commentators who want to make big, scary claims, or for readers looking for

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