n-deliverable forwards (NDFs) allow investors and borrowers to take positions in currencies that are subject to official controls. Turnover in NDFs has risen in recent years as non-residents use them to hedge increasing investment in local currency bonds. Pricing in deliverable forward and NDF...

Wider use of central counterparties (CCPs) for over-the-counter derivatives has the potential to improve market resilience by lowering counterparty risk and increasing transparency. However, CCPs alone are not sufficient to ensure the resilience and efficiency of derivatives markets.

From June 2011, the BIS credit derivatives statistics provide more granular information on the types of risks transferred through credit default swaps by different groups of counterparties. The new data suggest that reporting dealers have used some hard-to-value credit derivatives to transfer...

During the financial crisis, Korea responded to dislocations in the FX swap market by both drawing on its swap line with the Federal Reserve and using its own international reserves to provide dollars to domestic banks. We show that the Bank of Korea's use of the Fed swap line was very effective...

A surge in structured finance in Asia and the Pacific has been driven by the securitisation of consumer loans and mortgages, a largely liquidity transforming activity. The securitisation of corporate debt in the region has so far seen relatively few deals but has a largely untapped potential to...

Much progress has been made in reducing settlement risk in foreign exchange markets, particularly through use of CLS Bank. However, the remaining exposures are sometimes still significantly large and not always well managed, creating the potential for systemic risk. To address this problem, it...

In Asia, government-supported housing agencies have played a constructive role in the development of domestic residential mortgage and bond markets. Several agencies have increased their overall market presence in recent years by expanding their activities and have accepted a larger share of the...

Significant US house price appreciation in the last few years has greatly helped to enlarge the size and scope of secondary markets for securities backed by non-prime mortgage loans. But while many households now have access to loans which otherwise might not have been available, were housing...

Domestic bond markets in Latin America have expanded significantly over the past few years. This development should help reduce the region's historical dependence on external financing. Although much progress has been made, vulnerabilities associated with refinancing risk remain and secondary...

As reserve accumulation has gathered pace in recent years, and as foreign exchange (FX) reserve holdings have risen far above conventional measures of reserve adequacy, a vigorous debate has begun as to whether part of the reserves should be invested in riskier assets to reduce their financial...