ISDA survey shows doubling of outstanding credit derivatives in past year

By Angela McDaniels

Seattle, Sept. 19 - The estimated amount of outstanding credit derivatives grew by 109% to $26 trillion at the end of June from $12.4 trillion at mid-year 2005, according to the International Swaps and Derivatives Association, Inc.'s Mid-Year 2006 Market Survey of privately negotiated derivatives.

For the first six months, the growth was 52% from $17.1 trillion at the end of 2005. For the purposes of the survey, credit derivatives include credit default swaps referencing single names, indexes, baskets and portfolios, the association said in a news release.

The estimated amount of outstanding interest rate derivatives, which include interest rate swaps and options and cross-currency swaps, grew by 18% to $250.8 trillion at mid-year from $213.2 trillion at the beginning of 2006. The annual growth rate for interest rate derivatives to mid-2006 is 25% from $201.4 trillion in mid-2005.

The survey results reflect amounts outstanding as of the reporting date, adjusted for double counting of inter-dealer transactions. The association released the results of its survey at its 2006 Regional Member Conference in London on Tuesday.

The International Swaps and Derivatives Association is a financial trade association that represents participants in the privately negotiated derivatives industry. The association surveys its primary members twice yearly. In this survey, 101 firms provided data, including all major dealers.

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