Derivatives in emerging markets

BIS Quarterly Review  |  December 2010  | 
13 December 2010

Turnover of derivatives has grown more rapidly in emerging markets than in developed countries. Foreign exchange derivatives are the most commonly traded of all risk categories, with increasingly frequent turnover in emerging market currencies and a growing share of cross-border transactions. As the global reach of the financial centres in emerging Asia has expanded, the offshore trading of many emerging market currency derivatives has risen as well. Growth in derivatives turnover is positively related to trade, financial activity and per capita income.

JEL classification: F31, G15, G20, P45