The Bank for International Settlements (BIS) published a Quarterly Review article explaining how its derivatives statistics can be used to analyse the size and structure of global derivatives markets and to track structural change across key risk categories. Using these datasets, the article highlights two major developments with supervisory relevance: the transition from Libor to risk-free rates in interest rate derivatives and the growing use of foreign exchange (FX) derivatives to support cross-border portfolio allocation and hedging. The article maps the main BIS collections, including the Triennial Survey of turnover in FX and interest rate derivatives, the semi-annual BIS OTC derivatives statistics on outstanding notional amounts and gross market values across five risk categories, and exchange-traded derivatives data. It documents post-Global Financial Crisis shifts towards standardisation and central clearing, noting that exchange-traded instruments accounted for nearly 70% of total interest rate derivatives turnover in April 2025 and that more than half of outstanding OTC interest rate and credit derivatives are centrally cleared, while only a fraction of FX derivatives is cleared. Market activity is also highly concentrated, with end-2024 disclosures suggesting the top 10 banks hold almost 60% of global outstanding FX derivatives and US banks are on one side of more than 30% of FX notionals. On the demand side, “other financial institutions” positions in FX swaps and forwards have more than tripled since 2009 and are presented as a barometer of global portfolio flows and financial conditions, alongside examples linking cross-currency basis and yen-funded carry trades to observable footprints in BIS statistics. The article concludes that data gaps remain for financial stability analysis, particularly in OTC FX derivatives where principal exchanges can generate large payment obligations and associated liquidity and counterparty risks. The BIS, working with reporting central banks, is reviewing the BIS OTC derivatives statistics with the aim of closing gaps such as limited information on directional positions by currency and the geography of FX-related payment obligations.
Bank for International Settlements 2025-12-08
Bank for International Settlements reviews derivatives market shifts using BIS statistics and highlights data gaps in OTC FX derivatives
The Bank for International Settlements (BIS) published a Quarterly Review article on using its derivatives statistics to analyze global markets and track structural changes. Key developments include the transition from Libor to risk-free rates in interest rate derivatives and increased use of foreign exchange derivatives for cross-border portfolio allocation. The BIS is reviewing its OTC derivatives statistics to address data gaps, particularly in FX derivatives, to enhance financial stability analysis.