Key takeaways
- Easy money continued to drive financial markets. Searching for yield, investors extended credit to riskier firms at progressively lower rates and on looser terms. But banks, especially in the euro area, struggled further to regain the market's confidence.
- The Fed's hint that it might "taper" its asset purchases was followed by a sharp fall in cross-border credit to some large emerging market economies.
- Daily turnover in the global FX market reached an all-time high of $5.3 trillion in April 2013. Non-dealer financial institutions are playing a more active role, as Dagfinn Rime (Central Bank of Norway) and Andreas Schrimpf (BIS) show.
- Monthly FX market turnover has fallen since the Triennial Central Bank Survey in April 2013, report Morten Bech and Jhuvesh Sobrun (BIS).
- OTC derivatives turnover has soared in emerging markets since 2010. Torsten Ehlers and Frank Packer (BIS) find that emerging market currencies are increasingly traded offshore.
- Turnover in the OTC interest rate derivatives market has continued to grow despite low and stable interest rates, but much more slowly than before the crisis, report Jacob Gyntelberg and Christian Upper (BIS).
International banking and financial market developments
Special features
The views expressed here do not necessarily reflect the views of the BIS member central banks.