Proceedings

agreements, which had dropped slightly in the half-year up to end - 2009 (–6%)
increased by 2% to 3.6 trillion $. Overall, nominal growth in amounts outstanding was
subdued or negative in all risk categories, with a 7% drop in credit derivatives leading
in percentage terms.
We can easily notice that the most used instruments on this market are the derivatives
on interest rates. The second place is held by the Credit Default Swaps, these being
the most used category of derivatives on the OTC market and not only. In our opinion,
the degree of information and education regarding the derivatives financial
instruments used influences the degree of exposure to the associated risks.
Figure 3. The structure of derivatives products on the global OTC market
(Source: Triennial and semiannual surveys, Positions in global over the counter (OTC)
derivatives markets at end-June 2010, 2010:9)
Notional amounts outstanding of OTC interest rate derivatives remained stable at 452
trillion $ in the first half of 2010, after increasing by 3% in the previous six months.
Positions between reporting dealer fell by 5%, while business with non-financial
customers grew by 6%, mainly in short maturities. Market values were buoyant, rising
by 25% in aggregate in the half-year up to June 2010, with the value of contracts on
US dollar interest rates increasing by 42%.
Notional amounts outstanding of credit default swaps declined for the fifth
consecutive period, largely due to terminations of existing contracts. The structure of
the market continued to change. Positions in the generally more liquid multi-name
contracts increased by 10%, while those in single-name contracts continued to
decline, with a decrease of 16%. Gross market values for single-name contracts
dropped by 20%, while those for multi-name contracts increased by 21%.
In our opinion, the credit default swap contracts’ market, estimated at 55 trillions $,
but unregulated and lacking transparence, could generate the next crises of the
financial system. While the fear of a new crises on the credit default swap contracts
market is accentuated in the financial system, the apparently imminent intervention of
the authorities (in order to regulate these contracts and make them more transparent)
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