The increase in over-the-counter (OTC) derivatives positions that took place in the first half of 2016 was reversed in the second half of the year, according to statistics released Tuesday by the Bank for International Settlements (BIS).
Specifically, the BIS reports that the notional amount of outstanding OTC derivatives declined from US$553 trillion to US$483 trillion from the end of June until the end of the year. Additionally, the gross market value of those outstanding contracts fell from US$21 trillion at mid-year to US$15 trillion by the end of 2016.
Central clearing continues to gain traction, according to the BIS. In particular, it says that the share of credit default swaps (CDS) that were centrally cleared rose from 37% of notional amounts outstanding at the end of June to 44% at the end of December. For interest rate derivatives, the share that were centrally cleared was more or less unchanged at 76%, the BIS notes.