The figures are from bank call reports filed for the first quarter of 1996. Bank credit exposure from derivatives continued to decline. The notional amount of interest rate and foreign exchange contracts rose in the quarter while commodity and equity contracts declined. The number of banks holding derivatives declined by nine in the first quarter to 549 banks.
Derivatives continue to be concentrated in the largest banks.
Revenues from trading activities, which include off-balance sheet derivatives and cash instruments, rose 26 percent from the previous quarter. The top nine banks' credit exposure from derivatives declined from 250 percent to 234 percent of risk based capital. The decline in credit exposure from derivatives is mostly a result of increased use by banks of bilateral netting to reduce exposure. Banks continue to maintain relative balance in their exposure to market risk. This risk is measured by positive and negative fair values of derivatives portfolios.