Irish Results of the BIS Foreign Exchange and Interest Rate Derivatives Survey 2013

The Central Bank of Ireland participated in the most recent survey of global turnover in foreign exchange and over-the-counter single-currency interest rate derivatives. The survey is coordinated by the Bank for International Settlements every three years, and Ireland has participated since 1995. The survey results for Ireland show a sharp fall in turnover in both foreign exchange and interest rate derivatives since the last survey in 2010. There are two driving factors behind the decline between 2010 and 2013. Firstly, the landscape of the Irish banking sector has changed dramatically; banks have exited the Irish market, through liquidation or wind down. There has also been significant restructuring of the Irish banking system, with deleveraging of overseas assets. Less cross-border exposure reduces the need for hedging of currencies or interest rate risks. In contrast, the results of the global survey indicate that April 2013 was one of the most active months in trading of foreign exchange derivatives, partly due to a regime shift in monetary policy by the Bank of Japan.