OeNB - BIZ-Survey 1998 - Turnover in foreign exchange trading and in derivatives products during April 1998

Wien (OTS) - The Bank for International Settlements (BIS)
gathers data in 3-year intervals on turnover in foreign
exchange trading around the world. The Oesterreichische Nationalbank, 1 of a total of 40 participating countries, is publishing Austria’s data on foreign exchange and derivatives turnover for the month of April 1998.
This data will be available on the following web-site:

The BIS will issue a press release at a later date which will include the publication of the aggregated data of all
participating countries. This will be found on the following web-site: www.bis.org/publ/r_fx98.htm.

The data published by the BIS will be adjusted for double counting by participating banks (‘reporting dealers’) from around the world.
The data in the attachment to this press release has been adjusted only for double counting by the participating
Austrian banks (‘local reporting dealers’) and is not therefore directly comparable with the BIS data. The data broken
down by maturity is published on a gross basis, i.e. without adjusting for double counting at the national level.

There have been considerable changes in Austria’s financial markets since the last survey and the turnover data for April 1998 cannot therefore be directly compared with the results of the 1995 survey. Moreover, the sample of participating banks has changed since some banks are no longer trading actively and other market participants have significantly changed the composition of their portfolios. Mergers within Austria’s group of the top 5 banks have also had an influence on the turnover data.

Overall it is possible to observe a shift away from traditional foreign exchange business towards more complex derivatives
business. However, some banks have pursued the opposite strategy, continuing to develop their established position in traditional foreign exchange business.

The turnover data in detail

Turnover on the Austrian foreign exchange market comprising
spot business, outright forwards and foreign exchange swaps
reached USD 209.8bn in April 1998. This is equivalent to
average daily turnover of USD 10.5bn for the 20 business days in April 1998.
Compared with total turnover in April 1995, this represents a decrease of 13%, which can essentially be attributed to a
reduction in spot transactions.

Turnover in derivatives business - comprising currency swaps , OTC foreign exchange options as well as interest rate contracts (FRAs, interest rate swaps and interest rate options) -
amounted to USD 91.9bn in April - i.e. average daily turnover of
USD 4.6bn. This means that, compared with 1995, daily turnover
has doubled from the USD 2.3bn reported in that survey.

Total turnover in foreign exchange and derivatives business has risen by 7% since 1995, during which time, as already mentioned, there has been a shift away from traditional foreign exchange business towards more complex derivatives business.

Breakdown of market segments

Spot trading continues to account for the largest amount of
total foreign exchange turnover (51% of the total or USD 107.1bn), followed by trading in fx swaps with 44% (USD 92bn) of the total, while merely 5% or USD 10.6bn is accounted for by outright forward business.

As far as derivatives business is concerned, interest rate
swaps recorded the largest turnover figures (45% or USD 41.6bn), followed by FRAs and foreign exchange options with almost
equally strong market shares of 25% or USD 22.7bn. Turnover in currency swaps (3% or USD 2.6bn) and interest rate options (2% or USD 2.3bn) was markedly lower.

Turnover by currency pairs

As was the case in 1995, by far the most frequently traded currency pairs were USD/DEM, ATS/USD and ATS/DEM. Trading in USD/DEM (turnover in foreign exchange and derivatives)
attained a market share of almost 44% with a turnover of USD 101.2bn. In second place was turnover in ATS/USD with a market share of around 18% (USD 40.8bn) followed by turnover in
ATS/DEM transactions with a market share of 7% or USD 16.5bn.

In the case of interest rate contracts, the total turnover of
USD 66.5bn was structured as follows: the highest turnover in
April was recorded for DEM business which accounted for 33% (USD 22.2bn) followed by transactions in ATS with 28% or USD 18.7bn of the total. Interest rate contracts in CHF and USD had roughly similar market shares in the order of 9%.

Counterparties exchange streams of interest payments in
different currencies for an agreed period of time and exchange principal amounts at maturity Agreement to exchange periodic payments related to interest rates on a single currency

Rückfragen & Kontakt:

Oesterreichische Nationalbank
Sekretariat des Direktoriums/
Tel.Nr.: (+1) 404 20 DW 6666
Internet: http://www.oenb.co.at