US commercial banks’ trading revenues down 21.5%
Total cash and derivative trading revenues at US commercial banks decreased by $508 million, to $1.86 billion, in the final quarter of 2002, according to research from the Office of the Comptroller of Currency (OCC).
The US bank regulator's latest quarterly report on banks’ derivatives trading activity shows that the total notional outstandings of derivatives contracts held by US commercial banks increased by $2.9 trillion, to $56.1 trillion, during the same period.The credit derivatives segment of the market had the largest proportionate increase in notional size. During the fourth quarter, the credit derivatives market grew by 10.8% to $635 billion. The total notional of protection sold increased by $20 billion to $291 billion. The total notional of protection bought increased by $41.6 billion to $343 billion.
Kathryn Dick, Washington-based deputy comptroller for risk evaluation at the OCC said the decline in the value [on the back of tightening credit spreads] of credit derivative hedges of loan portfolios is a “major factor” to take into account when comparing figures for the third and fourth quarters.
Total credit exposure - consisting of current mark-to-market exposure after netting benefits, and potential future exposure - increased by $24 billion to $594 billion during the fourth quarter. “The increase in credit exposure resulted primarily from the growth in notional amounts, particularly for interest rate contracts maturing beyond five years,” Dick said.
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
Banks will not be frowned upon for discount window borrowing – Fed official
Risk Live: more banks have completed paperwork to access Fed lending facility than a year ago
Capital One puts OCC’s tough stance on mergers to the test
Proposed Discover deal should be approved but will go under the microscope, ex-regulators say
As FCMs dwindle, regulators fear systemic risk
Panellists highlight dangers of clearing membership becoming more concentrated
EU banks fear green asset ratios paint an unfair picture
Industry lobbyist clashes with lawmaker over usefulness of new sustainability disclosure
EU watchdogs to launch prop trader capital review in April
Prop traders say bank-style IFR rules are driving them out, but doubt EBA will suggest changes
Investors say new SEC disclosures may sit on shelf
Advisory committee questions value of rule 605 changes, even for retail investors
CFTC hears ‘call to action’ from swaps end-users on Basel III
Commissioner Pham mulls engaging with prudential regulators over capital hit on clearing
Iosco gears up for ‘intensive work’ on AI regulation
Watchdogs risk ‘falling behind the curve’, secretary-general warns; FSB also working on guidance
Most read
- As FCMs dwindle, regulators fear systemic risk
- Options market still searching for cause of the Vix plunge
- Top 10 op risks: AI fears drive cyber risk to record high