On May 10th, the Bank for International Settlements (“BIS”) released a report on the OTC derivatives market in the second half of 2009 (the “Second 2009 Report”). According to the Second 2009 Report, the total notional amounts outstanding of OTC derivatives increased by two percent (2%) to $615 trillion by the end of 2009, after an increase of ten percent (10%) in the first half of 2009. Interest rate swaps remain, by far, the largest segment of the OTC derivatives market, with approximately $350 trillion in notional amounts outstanding. Commodities transactions and credit default swaps (“CDS”) each registered a reduction in notional amounts outstanding of twenty-one percent (21%) and nine percent (9%), respectively.
According to the Second 2009 Report, despite the increase in total notional amounts outstanding, the gross market value of all OTC derivatives positions (i.e., the cost of replacing such contracts) declined in the second half of 2009, as did the overall gross credit exposure of such transactions (i.e., gross credit exposures after taking into account enforceable bilateral netting agreements, excluding CDS for all countries except the United States). Gross market value declined by fifteen percent (15%) and overall gross credit exposure declined by six percent (6%) in the second half of 2009; each had also substantially declined in the first half of 2009.
 Note, however, that CDS positions on sovereign debt increased ten percent (10%) from the first half of the year. For a discussion of the renewed calls to regulate sovereign debt CDS, see the March 2010 Derivatives Month in Review.