Bank survey of foreign exchange and derivatives market activity in Germany

In April 2013, a survey of foreign exchange and derivatives market activity was carried out by central banks in 53 countries, including all the major financial centres.In consultation with the Bank for International Settlements (BIS), these surveys have been carried out every three years since 1989. The objective of the survey is to provide comprehensive and internationally comparable data on the scope and structure of the global foreign exchange markets in order to gain a better understanding of the financial markets. In Germany, the Bundesbank surveyed 30 large banks which account for around 95% of foreign exchange trading and derivatives transactions conducted in Germany.

The participating countries and the BIS publish the results simultaneously, showing both national and global data.

1 Foreign exchange market turnover in Germany

For the survey period April 2013, the participating banks reported turnover in foreign exchange spot and forward contracts amounting to a total of US$2,329 billion after eliminating doubly recorded transactions between domestic traders. As a trading centre, Germany still ranks in the top third in an international comparison. Given 21 trading days in April 2013, this works out at an average daily turnover of US$111 billion, of which US$24 billion was accounted for by spot transactions and US$87 billion by forward contracts (outright forwards, foreign exchange swaps, currency swaps and foreign exchange options).

The daily trading volume rose by a total of 2%, which was only moderately higher than the value recorded in the last reference month, April 2010. This can, however, be attributed to very different trends. Whereas the increase is the result of marked 23% growth in foreign exchange swaps to US$79 billion, turnover in spot transactions fell by 20%, taking it below even its April 2007 level. Developments in foreign exchange forwards in Germany are therefore parallel to the global trend identified by the BIS, whereas developments in spot transactions in Germany run counter to it.

The vast majority (86%) of transactions were related to turnover with non-residents. The relative importance of the traded currencies showed little change from April 2010. The euro’s share of turnover declined by 4 percentage points to 59%. The combination euro/US dollar accounted for 42% of transactions. In a further 17% of transactions, the euro was exchanged against other currencies. 38% of turnover was generated in transactions where US dollars were exchanged for other currencies.

2 OTC trading with interest rate derivatives in Germany

The survey on OTC trading in interest rate derivatives covers the reporting banks’ OTC transactions in interest rate swaps, interest rate options and forward rate agreements in April 2013. With transactions totalling US$2,128 billion (nominal value), turnover in Germany was more than doubled compared with April 2010 (US$969 billion). This result was due to the large, more than fourfold increase in forward rate agreements compared with April 2010 to US$1,621 billion. This growth is considerably more pronounced in the result for Germany than it is in the global data. This was due mainly to changes in the activities of individual large domestic market players. The decline in interest rate swaps in Germany by almost one-quarter to US$482 billion runs counter to developments worldwide, while the drop in interest rate options to US$25 billion in April 2013 is consistent with international developments.

3 Overall results for all countries

Simultaneously with the national central banks, the BIS is today publishing a statement with the aggregated survey results for all participating countries. In these results, double counting of cross-border transactions is eliminated in order to allow an accurate appraisal of the total volume of international foreign exchange trading and derivatives business.