![Risk.net](https://www.risk.net/sites/default/files/styles/print_logo/public/2018-09/print-logo.png?itok=1TpHrpuP)
BIS announces a fall in banks’ derivatives positions
The positive market value of banks’ derivatives positions fell by $214 billion in three months last year, as banks became warier of leverage.
Kenneth Broux, an economist at Lloyds TSB Financial Markets, said this was a substantial drop and could reflect the market peaking and risk aversion increasing, as many institutional and sovereign players became more leveraged and aware of the risk inherent to a global tightening in monetary policy.
Broux said: “Many positions have been leveraged to US interest rates coming down in early 2007 ... so if you’ve been shorting interest rate derivatives in the US, those positions have to be closed out…many more players, especially hedge funds, will have been cutting their positions.”
The statistics reported that this decrease was mainly due to declines of $80 billion in the UK to $4.3 trillion in September 2006, and of $54 billion in the US to $5.4 trillion in September. Broux explained that these decreases reflect the concentration of hedge funds in the US and the UK closing their positions.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
SEC intensifies scrutiny on ‘AI washing’
Regulator made first enforcement actions against high-tech misrepresentations this year
Hong Kong looks for digital response to trade reporting burden
New swaps reporting framework will include more fields than requirements in US or Singapore
Shocks to the system: how Basel IRRBB update affects new EU test
Disclosures suggest more banks will be classified as outliers on net interest income assessment
Loss of diversification benefits ‘will drive higher FRTB charges’
Independent study backs industry’s claims of significant rise in market risk capital requirements
Calls grow for dealers to unbundle US Treasury clearing
SEC’s Gensler and NY Fed’s Neal turn up pressure on dealers to clear ‘done away’ trades
Breaking with Behnam: inside the dysfunction at the CFTC
Policy and personality clashes have left the chairman isolated and slowed rulemaking activity to a crawl
As risk of US Basel delay grows, Europe is in a bind over CVA
European Commission may postpone FRTB, but it’s hard to separate surgically from rest of framework
FRTB start dates must align globally, says European Commission
Lawmaker could trigger delay to market risk rules in Europe if US implementation drags on
Most read
- Loss of diversification benefits ‘will drive higher FRTB charges’
- Citi halves swaptions book with US retail funds
- People: Barclays’ macro trade reshuffle, UBS board moves, and more