ISDA survey says credit default swaps outstanding double in 2006 to $34.5 trillion

By Angela McDaniels

Seattle, April 18 - The notional principal outstanding volume of credit default swaps grew by 33% to $34.5 trillion at Dec. 31 from $26.0 trillion at June 30, 2006, according to a survey conducted by the International Swaps and Derivatives Association (ISDA).

In comparison, the credit default swap volume grew by 52% during the first half of 2006.

The association said that for the year, credit default swaps outstanding grew by 102%, compared with 103% in 2005.

ISDA's Year-End 2006 Market Survey of privately negotiated derivatives included credit default swaps on single names, baskets and portfolios of credits and index trades.

Including interest rate derivatives and equity derivatives, the total notational amount of derivatives outstanding was $327.4 trillion as of Dec. 31, gross credit exposure before netting is estimated to be $8.8 trillion and credit exposure after netting is estimated to be $1.6 trillion, according to the survey.

"The privately negotiated derivatives industry continues to experience robust growth, reflecting both continued innovation and the globalization of risk management activity across geographic borders and business sectors," Robert Pickel, executive director and chief executive officer of ISDA, said in the release.

ISDA is a Boston-based financial trade association that represents participants in the privately negotiated derivatives industry.

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