CDS Volumes decline in H1 2009

BIS Semi-Annual Report on OTC Derivatives for H1 2009 released last week. The detailed stats are available here. It didn’t get any real coverage in the blogosphere. The report indicates CDS volumes have declined in H1 2009. Key findings:

  • notional amounts of all types of OTC contracts rebounded somewhat to stand at $605 trillion at the end of June 2009, 10% above the level six months before,
  • gross market values decreased by 21% to $25 trillion,
  • gross credit exposures fell by 18% from an end-2008 peak of $4.5 trillion to $3.7 trillion,
  • notional amounts of CDS contracts continued to decline, albeit at a slower pace than in the second half of 2008 and
  • CDS gross market values shrank by 42%, following an increase of 60% during the previous six-month period.
  • The gross market value may have declined but is still at a staggering USD 25 trillion market. The notional amount is at USD 605 trillion. If it was not for this crisis it could have been a USD 800 trillion plus market. All this size without any regulation, without any oversight. Amazing.

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