Office of the Comptroller of the Currency–Derivatives Held by American Banks Increase by $30 Trillion

Thanks for Rob Kirby of Kirby Analytics for bringing this to my attention. The latest report shows a BUILD in outstanding derivatives held by American bank holding cos. in the amount of 30+ Trillion in notional value.  The increases are virtually ALL confined to two categories, Over the Counter Swaps [off balance sheet interest rate products] and Over the Counter Forwards [off balance sheet foreign exchange products]. Kirby thinks that Q1/21 the US Treasury in conjunction with the NY Fed trading desk are engaged in aggressive YIELD CURVE MANAGEMENT [via interest rate swaps] and aggressive foreign exchange [read:  US dollar] “management” via Over the Counter Forwards. This is something to be aware of.

The Office of the Comptroller recently released their Q1/21 Quarterly Derivatives Report – take note of the data in Appendix Table 2 – [Derivatives held by American Bank Holding Companies.]:

Quarterly Derivatives Report First Quarter 2021 (occ.gov)

You can compare Q1/21 to Q4/20 by viewing Q4 numbers here:

Quarterly Derivatives Report Fourth Quarter 2020 (occ.gov)

Published by markskidmore

Mark Skidmore is Professor of Economics at Michigan State University where he holds the Morris Chair in State and Local Government Finance and Policy. His research focuses on topics in public finance, regional economics, and the economics of natural disasters. Mark created the Lighthouse Economics website and blog to share economic research and information relevant for navigating tumultuous times.

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