Don’t always believe a balance sheet
Financial Times
According to the latest data from the Bank for International Settlements, the central bankers’ central bank, the total amount of outstanding derivative contracts has declined from a 2012 peak of $700tn to about $550tn. To put this into perspective, the figure has fallen from just under three times the value of all the assets in the world to a little over twice the value. The largest element is interest rate swaps followed by foreign exchange derivatives. Credit default swaps, the instrument at the heart of the 2008 global financial crisis, are now relatively small — if you can accustom yourself to a world in which $15tn is a small number. It is only slightly less than the US gross domestic product (a little more than $18tn in the final quarter of 2015).