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OTC derivatives: euro exposures rise and central clearing advances

Author

Listed:
  • Sirio Aramonte
  • Wenqian Huang

Abstract

The composition of amounts outstanding in over-the-counter derivatives shifted towards the euro and cleared instruments. Since the Great Financial Crisis, increases in central clearing rates have helped shape growth in amounts outstanding. Derivatives subject to regulatory clearing mandates were approaching full clearing, while clearing rates were low for certain products, including some with short maturities or liquid bilateral markets.

Suggested Citation

  • Sirio Aramonte & Wenqian Huang, 2019. "OTC derivatives: euro exposures rise and central clearing advances," BIS Quarterly Review, Bank for International Settlements, December.
    • Handle: RePEc:bis:bisqtr:1912j
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    References listed on IDEAS

    as
    1. Robert Neil McCauley & Patrick McGuire & Vladyslav Sushko, 2015. "Dollar credit to emerging market economies," BIS Quarterly Review, Bank for International Settlements, December.
    2. Torsten Ehlers & Bryan Hardy, 2019. "The evolution of OTC interest rate derivatives markets," BIS Quarterly Review, Bank for International Settlements, December.
    3. Amihud, Yakov, 2002. "Illiquidity and stock returns: cross-section and time-series effects," Journal of Financial Markets, Elsevier, vol. 5(1), pages 31-56, January.
    4. Nikhil Patel & Dora Xia, 2019. "Offshore markets drive trading of emerging market currencies," BIS Quarterly Review, Bank for International Settlements, December.
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    6. Christian Upper & Marcos Valli, 2016. "Emerging derivatives markets?," BIS Quarterly Review, Bank for International Settlements, December.
    7. Ghamami, Samim & Glasserman, Paul, 2017. "Does OTC derivatives reform incentivize central clearing?," Journal of Financial Intermediation, Elsevier, vol. 32(C), pages 76-87.
    8. Claudio Borio & Robert Neil McCauley & Patrick McGuire, 2017. "FX swaps and forwards: missing global debt?," BIS Quarterly Review, Bank for International Settlements, September.
    9. Andreas Schrimpf & Vladyslav Sushko, 2019. "Sizing up global foreign exchange markets," BIS Quarterly Review, Bank for International Settlements, December.
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    Cited by:

    1. Shiraya, Kenichiro & Yamakami, Tomohisa, 2024. "Constructing copulas using corrected Hermite polynomial expansion for estimating cross foreign exchange volatility," European Journal of Operational Research, Elsevier, vol. 314(3), pages 1195-1214.
    2. Torsten Ehlers & Bryan Hardy, 2019. "The evolution of OTC interest rate derivatives markets," BIS Quarterly Review, Bank for International Settlements, December.
    3. Wenqian Huang & Elöd Takáts, 2024. "Model Risk at Central Counterparties: Is Skin in the Game a Game Changer?," International Journal of Central Banking, International Journal of Central Banking, vol. 20(3), pages 161-184, July.
    4. Nikhil Patel & Dora Xia, 2019. "Offshore markets drive trading of emerging market currencies," BIS Quarterly Review, Bank for International Settlements, December.
    5. Friesz, Melinda & Váradi, Kata, 2023. "Your skin or mine: Ensuring the viability of a central counterparty," Emerging Markets Review, Elsevier, vol. 57(C).
    6. Philip Wooldridge, 2019. "FX and OTC derivatives markets through the lens of the Triennial Survey," BIS Quarterly Review, Bank for International Settlements, December.
    7. Lannoo, Karel & Thomadakis, Apostolos, 2020. "Derivatives in Sustainable Finance," ECMI Papers 29791, Centre for European Policy Studies.

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    More about this item

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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