The Bankwatch

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Posts Tagged ‘ISDA

How much outstanding in derivatives in the world? | $ 684 trillion


It is impossible to comprehend this amount of money.  $531 UPDATE $684 trillion represents 3 or 4 times the combined value of the worlds equity markets, bond markets, and world GDP.  It is a stunning number.

There is a possibility that we need to add in the combined value of homes and other assets in the world to come to terms with the number, but then we risk double counting assets which are already valued in equity markets.  Need to think that through some more.

This can only be described as ponzi money – money that is levered and based on multiplying and levering other money.  The underlying assets have been long forgotten.  This remains the unsaid problem with banks, and I believe represents a large part of why banks are not trusting each other yet.

That $531 $684 trillion represents off balance sheet lending by banks.  Each contract in those derivatives are guaranteed by a bank somewhere.  If added to bank leverage, banks would be bankrupt.

More on this as I root around.  Meantime here is the data from ISDA since 1987 to first half of 2008.

isda-market-survey-historical-data

UPDATE:  Information from Bank for International Settlements where they track a more complete view of Derivatives.

BIS http://www.bis.org/statistics/otcder/dt1920a.pdf

Written by Colin Henderson

February 27, 2009 at 03:28

Posted in Uncategorized

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