BIS Triennial Survey of Foreign Exchange and Over-The-Counter Interest Rate Derivatives Markets in April 2019 – UK Data

News release

In April this year, central banks and monetary authorities in 53 countries, including the United Kingdom, conducted the latest triennial survey of turnover in the markets for foreign exchange and over-the-counter (OTC) interest rate derivatives. The survey is co-ordinated on a global basis by the Bank for International Settlements (BIS), with the aim of obtaining comprehensive and internationally consistent information on the size and structure of the corresponding global markets. The Bank of England conducted the UK survey, which covers the business of leading financial institutions located within the United Kingdom in these markets.

The main findings of the UK survey are:

• Average daily turnover in foreign exchange was $3,576 billion in April 2019, compared to the $2,406 billion per day recorded in April 2016. The increase reverses the fall of 12% seen between the 2013 and 2016 surveys.
• The UK remains the single largest centre of foreign exchange activity with 43 per cent of global turnover, up from 37 per cent in April 2016. The distribution recorded in the 2019 survey is broadly in keeping with the UK global market share recorded in previous surveys.
• Average daily turnover in OTC interest rate derivatives was $3,670 billion during April 2019, increasing from the $1,181 billion recorded for April 2016.
• The market share of the UK has increased from 39 per cent in April 2016 to 50 per cent in April 2019. The UK has overtaken the US as the largest centre for OTC interest rate derivatives activity, whereas the US has decreased its global market share to 32 per cent, down from 41 per cent in April 2016. The 2019 survey is in keeping with the UK global market share recorded in the 2010 and 2013 surveys at 47 per cent and 50 per cent respectively.

The Bank of England will provide further detail for the UK at a later date.

The BIS is publishing preliminary global results today, with a detailed analysis to follow in December 2019. Central banks of many other countries are also publishing their own survey results; links to their websites can be found on the BIS website.

Notes to editors

1. Guidance on coverage: Part of the increase between the 2016 and 2019 surveys reflect a more comprehensive reporting of ‘related party trades’ (see note 8 below). Users should bear in mind the more comprehensive coverage when comparing the 2019 results to those of previous years.
2. A total of 55 institutions, mainly commercial and investment banks, participated in the UK survey. As with previous surveys, only firms that participate in the inter-dealer market and/or have a large active derivative business with customers were asked to complete the 2019 survey. Small institutions were not asked to participate in order to reduce their reporting burden. For those institutions active in the UK market but not participating in the survey, their transactions with participating institutions will have been recorded by those institutions.
3. For the 20 business days in April 2019, participants were asked to provide details of their gross turnover in each market, broken down between specified categories of currency, transaction and counterparty. Gross turnover (measured in nominal values) is defined as the absolute total value of all deals entered into during the month – ie there is no netting of purchases against sales. Data were requested in terms of US dollar equivalents, rounded to the nearest million.
4. The basis of reporting was the location of the sales desk of the trade, as in the previous four surveys. Prior to the 2004 survey the basis of reporting was the location of the trading desk.
5. In the United Kingdom an adjustment is made for the fact that trades between participants in the UK survey will have been reported by both parties to the transaction; other countries have also adjusted their data in this way. The BIS have, in addition, adjusted the global data for cross-border double counting prior to publication today. Aggregating published national results would overstate global turnover due to cross-border double counting.
6. Since October 2004, the Foreign Exchange Joint Standing Committee (FXJSC) has been publishing a turnover survey for the United Kingdom every six months, based on a smaller sample of 30 banks. That survey is very similar to the triennial survey except that the reporting basis is the location of trading desks. See The London Foreign Exchange Joint Standing Committee for further details of the FXJSC. See Results of the Semi-Annual FX Turnover Surveys in April 2019 for the April 2019 FXJSC turnover survey. Market committees in other major financial centres (including New York, Singapore, Canada, Tokyo and Australia) also publish more frequent surveys and details of their publications can be found in the FXJSC release.
7. Triennial surveys before 2010 used the expression ‘traditional foreign exchange markets’ to refer to spot transactions, outright forwards and foreign exchange swaps. This expression excludes currency swaps and currency options, which are included under OTC instruments. Beginning with the 2010 survey, the expression ‘global foreign exchange markets’ includes all five foreign exchange instruments. Turnover in foreign exchange markets is shown in Tables 1 to 4 while turnover in interest rate derivatives is shown in Tables 5 to 7.
8. Related party trades are transactions between desks and offices, transactions with branches and subsidiaries, and transactions between affiliated firms. These trades are included regardless of whether the counterparty is resident in the same country as the reporting dealer or in another country. Back-to-back trades that involve the transfer of risk from the sales desk to another affiliate are included. However, trades conducted as back-to-back deals and trades to facilitate internal bookkeeping and internal risk management within the same sales desk (ie reporting dealer) are excluded.