William Mitting looks back on a year when low interest rates, a scandal in the US and ongoing regulatory uncertainty combine ot create a perfect storm of volume declines. But despite this, he argues that there is cause to be optimistic for 2013.
The bull-run was always going to come to an end. After a
decade of unimaginable growth on global derivatives exchanges,
2012 saw an abrupt reversal of the trend and the worst
recession of volumes in the modern history of the industry.
Between 2002 and 2011, trading volumes on global derivative
exchanges soared from 4.2m in 2002 to 24.3m in 2011. A
significant proportion of this increase was down to the growth
in emerging markets. In 2002, volumes on exchanges in Europe
and North America stood at 3.5m, or 83% of total global
volumes. By 2011, that percentage had fallen to 48%.
The decline in global exchange traded volumes this year will
be the most significant fall in modern history. Since 1980,
volumes have declined in only three years: 1988, 1995 and 2009
and in 1995 and 2009, the volume declines of less than 0.5%
were not statistically significant. Even in 1988 in the wake of
the 1987 stock market crash, volumes were down less than
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