(1888PressRelease)
November 27, 2007 - Growth in the over-the-counter (OTC) derivatives market gathered pace in the first six months of the year, it has been revealed.
A report compiled by the Bank for International Settlements (BIS) reveals that the market for derivatives grew by 25 per cent to $516 trillion in the first half of 2007 - the fastest rate for at least nine years.
According to the bank, growth was led by a gain in credit default swaps, which expanded by 49 per cent.
"Growth accelerated in all risk categories with the possible exception of commodities, although once again the pace of increase in the credit segment outstripped the rises in other risk categories," the BIS said.
Credit derivatives have gained in popularity as investors have used them to speculate on a growing risk of defaults in the wake of a surge in US mortgage foreclosures.
The amount of money in the entire derivatives market is $11.1 trillion, the BIS has confirmed.
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