Índices de Concentración del Mercado de Derivados Financieros en Chile

This article presents concentration indicators of the main derivatives markets in Chile, corresponding to FX (USD-CLP), Swap Promedio Cámara (local nominal interest rate) and inflation (CLF-CLP) underlying assets. These indices are useful in identifying the structure of these markets, as well as the level of competition available to local companies and investors who need to carry out hedging operations to manage their financial risks or make investments. The indices are constructed using the Herfindahl Hirschmann methodology, which is widely used internationally to estimate levels of market concentration. For this purpose, outstanding notional amounts are considered, obtained from the Chilean financial derivatives market infrastructure SIID-TR, which has data since January 2022. For each underlying asset, indicators are prepared for three market sectors, (i) interbank, (ii) local market (local banks whose counterparties are non-bank residents) and (iii) foreign market (local banks whose counterparties are foreign investors). The results as of September 2024 show that the Interbank Swap Promedio Cámara and local (institutional investors and real sector companies) FX markets are the least concentrated. The most concentrated markets are inflation and FX with non-residents.