5 Oct 2014

BIS Financial Transaction Data for 2013 - Nearly $10 quadrillion, but hopelessly underestimated

The Bank for International Settlements has just published its prelminary release for "Statistics on payment, clearing and settlement systems" for the 23 countries that they cover. You can download the full publication as a 588 page pdf file, or you download Excel files for the Comparative Tables where everything is presented in dollars, or you can get the details for each country, in which case the numbers are given in local currency units.

I've done the hard work of putting everything together to get a picture of the total volume of transactions for the 23 countries. Here's the result.

As you can see, the total has increased by over $700 trillion since 2012. It's still not back to the $10.6 quadrillion seen in 2008, but it's getting there. Interestingly, Germany has moved right up the table, and now accounts for $1.46 quadrillion of the total on its own.

As usual, the numbers for the UK are hopelessly underestimated - which is why I have marked them in red in the table. Just look at table 18 (on page 412 of the document). Apparently there is still no way of the BIS getting any numbers for the London Stock Exchange - it's been nav (Not available) since 2009.

And have a look at table 21 for the UK. As usual, BIS has been unable to get any information about LCH.Clearnet. This is despite the fact that they only have to look at LCH.Clearnet's website to know that they have already processed $512,256,443,251,081 since the start of 2014 (as of the 3rd October). Maybe the guys at BIS who compile this stuff don't know how to use the internet?

The last time I complained to BIS about this, I was told that they relied on data provided by the Bank of England. And, according to page 581 of the BIS document, the guy at the BoE responsible for providing the numbers is someone called David Norcross. David, if you listening, can you try and be a bit more thorough? Please?

One good thing is that the data for the UK now includes a new entry for ICE Clear Europe - which has cleared  £84.3 trillions worth of contracts and transactions in 2013.

So you see, it can be done! Well done David! Keep up the good work!

And of course, in the figures for the USA, it would appear that the BIS has only ever heard about the NSCC, CHIPS and Fedwire.  Here's their Table 21.

There's not even a mention of players like the Options Clearing Corporation, "the the world's largest equity derivatives clearing organization" which handled over 4 billion contracts in 2013, and which might well be doing $12-$16 quadrillion in trades on its own - completely dwarfing ALL the transactions in the rest of the world put together.

They also don't appear to have heard of the Chicago Merchantile Exchange Group (CME). BIS would only have to look at their website to read that "CME Group is the world's leading and most diverse derivatives marketplace, handling 3 billion contracts worth approximately $1 quadrillion annually (on average)."

The BIS document (page 581) says that the two people at the Board of Governers of the Federal Reserve System responsible for compiling the numbers for the US are called Matthew Chen and David Mills. So, Matthew and David, you know what you have to do. For me, so far, it's a C-.

Oh, and while I'm at it, could Darren Flood and Jane Yates at the Reserve Bank of Australia try and get some numbers for ASX Clear and ASX 24? According to you, the numbers are "nav" since 2009. Is it really that difficult to get those figures? Come on... make an effort.

Maybe one day, somebody other that me, who is doing all this in my limited spare time, will get round to compiling the real numbers.

In the meantime, I suppose that we have to be grateful to the BIS for providing at least some fairly reliable numbers. $10 quadrillion is already a pretty large number. And a 0.1% flat rate transaction tax on all of that would indeed provide a lot a revenue ($1 trillion to be precise). Enough to scrap much of the current hopelessly inefficient and unfair taxes such as Income Tax, Corporation Tax, VAT and other sales taxes. Oh, and can I have a basic unconditional income for all at the same time?

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