The Bank for International Settlements reports continued strong growth in global over-the-counter derivatives markets.

Today the BIS released the latest statistics on positions in the global OTC derivatives market, reporting that positions grew at a rapid pace over the period since the last triennial survey in 2004.

Notional amounts outstanding increased by 135% to US$516 trillion at the end of June, which corresponds to an annualized compounded rate of growth of 33%. This is higher than the roughly 20% average annual rate of increase since positions in OTC derivatives were first surveyed by the BIS in 1995.

Particularly rapid growth was reported in the credit segment, where positions in credit derivatives increased more than tenfold to US$51 trillion, it said. Credit default swaps are by far the dominant instrument in this category, accounting for 88% of positions in credit derivatives.

Gross market values, which correspond to the cost of replacing all contracts at current market prices, increased at a lower rate (74%) than notional amounts, to US$11 trillion at the end of June.

Also, the BIS noted that activity in the OTC derivatives market accelerated in the first half of 2007, with notional amounts of all types of OTC contracts increasing by 25%, following a 12% increase in the second half of 2006.