New Data on Foreign-Exchange Contracts and OTC Interest Rate Derivatives Market in Ireland

The Central Bank of Ireland has published the results of the triennial survey of foreign exchange and interest-rate derivatives market activity in Ireland in April 2016.  The data are part of a global survey covering 52 countries organised by the Bank for International Settlements.

The key findings of the survey are:

• There was a substantial decline in the average daily turnover of both foreign-exchange contracts and interest-rate derivatives in Ireland between 2013 and 2016.
• While some of this is due to declining business by reporting institutions, the data was also heavily influenced by significant institutions withdrawing from Ireland, or closing sales desks in Ireland.^[1]
• In terms of foreign-exchange contracts, average daily turnover declined in Ireland from $10.3 billion a day in April 2013 to $2.2 billion per day in April 2016.^[2] This is a decline of 78 per cent, unadjusted for exchange rate movements.
• For interest-rate derivatives, average daily turnover fell in Ireland from $2.9 billion in April 2013 to $1.1 billion per day in April 2016. This is a decline of 63 per cent, unadjusted for exchange rate movements.
• The global results show that trading in foreign-exchange markets averaged $5.1 trillion per day in April 2016, down from $5.4 trillion in April 2013.
• The global results also show that daily turnover in OTC interest-rate deviates averaged $2.7 trillion in April 2016, and this was an increase from $2.3 trillion in April 2013.

• The importance of Ireland in these sectors globally declined over the past 3 years. Ireland ranked 46th globally in April 2016 in terms of turnover of foreign-exchange contracts, down from 33rd in April 2013. In terms of interest-rate derivatives, Ireland ranked 28th globally in April 2016, down from 23rd in 2013.

The Irish results^[3] can be accessed at:

 https://centralbank.ie/statistics/data-and-analysis/credit-and-banking-statistics/bis-survey-on-foreign-exchange-and-derivatives-markets

The global results can be accessed at the website of the Bank for International Settlements: http://www.bis.org/publ/rpfx16.htm.

Note:

The BIS Triennial Survey of foreign exchange and OTC interest-rate derivatives markets was introduced in 1989 and is a comprehensive source of information on global derivative markets. The 1989 survey covered foreign-exchange derivatives, and this was extended in 1995 to include OTC interest-rate derivatives. The 2016 survey covered 52 jurisdictions and 1,300 reporting agents. The Central Bank of Ireland surveyed 15 credit institutions operating foreign exchange and OTC interest-rate derivatives sales desks in Ireland. Survey participants provided details of their gross turnover for the 21 business days in April 2016, broken down by instrument type, counterparty and currency. Turnover data provide a measure of market activity, and can also provide a rough proxy of market liquidity. Turnover is defined as the gross value of all new deals during a given period and is measured in terms of the nominal or notional amount of the contracts. The country of turnover was based on the location of the sales desk, and all transactions were reported in US dollar equivalents.

--------------------------------------------------------------------------------

[1] For a list of participants in the survey, please see  https://centralbank.ie/statistics/data-and-analysis/credit-and-banking-statistics/bis-survey-on-foreign-exchange-and-derivatives-markets

^[2] All data are adjusted for local dealer double counting.

^[3] A more detailed analysis will be published at a later date.