Basics of Credit Derivatives

An easy-to-read primer on meaning, types and basics of credit derivatives Credit Derivatives- a primer
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Credit Derivatives: Market Info and awareness 

Credit derivatives markets in different countries Market data and developments
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A rich collection of articles on credit derivatives Vinod Kothari's book on Credit Derivatives and CDOs
A rich collection of articles on credit derivatives Articles on Credit Derivatives
An easy-to-read primer on meaning, types and basics of credit derivatives Workshop on Credit derivatives
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 Market data and developments

Updates


The credit derivatives market is estimated to have crossed USD 12 trillion by first half of 2005. See our credit derivatives news pages for regular updates.

 

Original write up - circa 2001

Credit derivatives market is still developing, but developing at a fast pace. The credit derivatives market has grown from $40 billion outstanding notional value in 1996 to an estimated $740 billion by the end of 2000, according to forecasts from the British Bankers' Association. The forecast, it seems will go wrong - the market is expected to exceed the forecast - see global market review page.

By end of 2001, the market was estimated at USD 1.2 trillion. As for year 2002, the estimates are that the market will cross USD 1.5 trillion.

None of the above data is perfect: to an extent, as for banking sector, the data is being picked by regulatory agencies and the BIS based on banks' reports, but since a larger part of the market is OTC, there is no centralised data collection. Hence the market size is based on estimates which in turn are based on surveys of the market players..

It is contended that the credit derivatives market is more active in Europe than it is in the US.

US commercial bank holding companies held an estimated $234bn in credit derivatives as of September according to Swaps Monitor, a New York based trade publication for over-the-counter derivatives markets. This registers a 47% growth over December previous year.

For developments in various markets, click on countries below:

  • Australia and New Zealand

  • India