23 Mar 2013

Updated transaction values for 2012 : Euroclear €541.6 trillion, SwapClear $385.4 trillion, OCC $16 quadrillion?

A few days ago I blogged about the New York Federal Reserve's analysis of how $15 trillion gets churned through the US Financial system every day. But they admitted that the data for a number of players was incomplete, meaning that the $15 trillion figure (which would mean about $3.75 quadrillion over a year) was underestimated.

So, let me help fill in a few numbers.

I last reported on EuroClear back in January 2012 when I noted that they had processed over €526 trillion in 2010. I'm happy to report that they are still going strong, and there is a nice graph on their website showing that this increased to €580.6 trillion in 2011. But times were a bit harder in 2012 - they only managed €541.5 trillion.

Still, slap a 0.1% FTT on that lot and you could generate €540 billion in a year.

Another of my favourite companies is LCH.Clearnet Ltd. They operate a number of systems, including SwapClear for which their website says that "Swapclear clears more than 50% of all OTC interest rate swaps and more than 95% of the overall cleared OTC interest rate swap market. We regularly clear in excess of $1 trillion notional per day and have more than 2 million cleared trades outstanding".

Here's a graph of monthly volumes over the past two years.

The total for 2012 comes to an impressive $385.4 trillion. But the figures for the start of 2013 have gone through the roof. They actually provide a daily breakdown of activity for each different currency together with the total for the year so far.

As you can see, on the 21 March, SwapClear processed a total of $2.371 trillion in a single day. And since the beginning of the year, they have handled $135,971,741,893,436 ($136 trillion). It's interesting to see that the most popular currency was the Euro for which the total has already reached nearly €54 trillion. One wonders why the ECB can't simply impose an FTT on all transactions involving Euros....

But there's another name that appeared in the Federal Reserve's report. A name that I hadn't heard of before. It's the Options Clearing Corporation (OCC) described by its website as "the world's largest equity derivatives clearing organisation". Indeed, the website says that in 2012 it cleared "4,042,175,801 contracts, a 12 percent decline from the 2011 record volume of 4,600,955,949 contracts". Unfortuately, I was unable to find any numbers concerning the value of all this activity.

For Euroclear, you can work out that the €541.6 trillion for 2012 involved 158.9 million  transactions. That means that each transaction was presumably worth around €3.4 million each - call that a round $4 million. If OCC's 4 billion trades involved similar sums, that would imply that OCC had handled something like $16 quadrillion worth of transactions.

Could that number be correct? If anyone out there can confirm, it would mean that my $5.5 quadrillion number for US financial transactions is hopelessly off. It could easily be $25 quadrillion.

Now that number is 10,000 times total US tax revenue. And that means that ALL the current US taxes could be replaced by a 0.01% tax on all electronic transactions.

Think about it....

1 comment:

  1. Simon, the number for OCC is about $25 trillion, OCC clears Equity derivatives mainly for CME Group