The global over-the-counter (OTC) derivatives market recorded a robust expansion in the second half of 2004, according to new data from the Bank of International Settlements.

Overall amounts outstanding were up by 12.8%, to US$248 trillion at the end of December, the BIS reported. The growth in the latter half of the year was slightly higher than in the first six months, when positions had grown by 11.6%.

Gross market values also rose noticeably, by 43% to US$9.1 trillion as of end-December. The bank also noted several other trends including: growth in notional amounts, especially in the interest rate segment; business in the swap segment is being led by European contracts; foreign exchange contracts expanded despite lacklustre activity in currency options; and, the growth in OTC derivatives is not being matched by exchange-traded contracts

In addition, the BIS published statistics on credit default swaps for the first time. It reported notional amounts outstanding of credit default swaps were US$6.3 trillion at the end of 2004.