4 ms·
It's notional. The actual quote from the report [1] is > Derivative notional amounts decreased in the third quarter of 2023 by $17.7 trillion, or 8.0 percent
by credit_guy 3y ago
It's notional. The actual quote from the report [1] is
> Derivative notional amounts decreased in the third quarter of 2023 by $17.7 trillion, or 8.0 percent, to $204.2 trillion.
The vast majority of all these derivatives are collateralized, and the collateral is updated daily. They are also subject to some form of extra collateral called (improperly) "initial margin", so in case one bank goes down for some reason, it doesn't take its counterparties with it.
[1] https://www.occ.gov/publications-and-resources/publications/quarterly-report-on-bank-trading-and-derivatives-activities/files/q3-2023-derivatives-quarterly.html https://www.occ.gov/publications-and-resources/publications/...