13 Jan 2019

BIS Transaction Data for 2017 - $12.35 quadrillion

Since I started this blog in 2010, one of my main obsessions has been to try and get the best information I can about the level of Global Financial Transactions - because I'm convinced that taxing global financial transactions is one of the best ways to fix the world's economic system and reduce the inequality that is threatening our very existence.

One of the best sources I have found is the Basle based Bank for International Settlements. In the past, they provided data in the form of downloadable Excel files or pdf documents that I would use to compile figures for the previous year. For example, here are my original posts going back over several years.
Last year, the BIS threw me a bit because they changed the way they present the data. Now, it's all done with interactive webpages and while on the face of it, this may seem more convenient,  for me it required a bit of time to get used to it.

However, I've now worked out how to compile the data. Essentially, the main figures can be found in a set of 3 tables that all provide values in billions of dollars

Table PS3 gives the value of transactions for a set of selected payments systems in billions of US dollars.
Table CCP3 gives the value of contracts and transactions cleared by a set of selected central counterparties and clearing houses - again in billions of dollars
Table CSD3 gives the value of delivery instructions processed by selected central securities deposiories.

A few other tables provide some other figures. For example Table CT7 gives the value of cashless payments, and Table CT8 gives the same numbers, but broken down according to the type of instrument (Credit transfers, Direct Debits, Cheques, Card and e-money payments, and other instruments). Table CT11 gives the value of withdrawals and deposits.  But these tables all give values in millions of US dollars. 

I've uploaded all the relevant figures into a Google Sheet that can be viewed here. It provides figures for the six years from 2012 till 2017. 

The bottom line is as follows. Total transactions for 2017 add up to 12,351,059 billion dollars (let's call that $12.35 quadrillion) - an increase of 6.8% on 2016.

If we look at the full six year period from 2012-7, we a total of nearly €69 quadrillion. The BIS's interactive website doesn't let you recover data before 2012, but see my earlier posts for the relevant data.


There are nearly 250 different entries in the full table, but we can get an idea of the biggest players by just showing the ones accounting for the largest amounts. The table below gives all the players that handled more than $100 trillion each. 

The biggest of them all is global clearing house CLS which handled over $1,346 trillion dollars worth of transactions in 2017. It's interesting that BIS doesn't even locate CLS in a particular place - it's location is "The world".

Number 2 is the Government Securities Division of the Fixed Income Clearing Corporation in the US (FICC) where transactions totalled $1,020 trillion. 

The UK based LCH.Clearnet is yet another player that handled over 1 quadrillion dollars worth of trades. 

We can also break down the transactions by country, as shown in the following table.


The USA is clearly at the top, with a total of $3.16 quadrillion, but the UK has increased its activity considerably with nearly $1.72 quadrillion in 2017 - up 22.6% on 2016, despite Brexit fears. China and Japan are also both in the quadrillion dollar group. 

Relative to the BIS's previous analysis, it is worth noticing that there have been a couple of significant changes. Firstly, there are some new countries that were not present before. For example, Indonesia and Argentina were not included in previous years, but the BIS has provided reasonably complete data for both countries since 2012. 

On the other hand, it is apparently the case that BIS is no longer offering data in Local Currency Units. Only values converted to US dollars are provided. This is, I think, a real shame because changes in a particular country's level of transactions could simply be the result of changes in the exchange rate. If someone from BIS reads my blog (you never know!) can we please have the option of getting the data in local currency units too?

The other major problem is that the BIS's figures are clearly incomplete. The most glaring omission is the absence of the Chicago based Options Clearing Corporation. This major player cleared a staggering 5.24 billion contracts in 2018  - 22.6% up on the previous year. Apparently, the Bank for International Settlements hasn't heard of them.  It is not clear to me how much those 5.24 billion contracts are worth, but OCC does reveal that in 2018, the premiums associated with Equity options trading (which accounts for 2.56 billion trades) totalled over $852 billion, compared with only $492 billion in 2017.  For Index/Other Options, the premiums on 564 million trades exceeded $1042 billion, again massively increased on 2017 when the premiums were less than $555 billion. 

If someone can let me know how to calculate the value of a transaction based on the premium, I would be very interested. 

Frankly, OCC alone could be handling more financial transactions than the rest of the financial system combined. 

Isn't it about time that someone (other than an amateur economist working from home) took these questions seriously? 

The issue of the true value of financial transactions could become very important. I've been proposing that a global financial transaction tax of just 0.1% could generate enough revenue to provide a Universal Basic Income at half the median local income for every person on the planet. To get that figure, I assumed a figure of $11 quadrillion. But, the latest BIS figures show that the number I was uising is at least 10% less than the current value. With the missing OCC figures, the potential for a global FTT to provide a universal basic income becomes even more obvious.


No comments:

Post a Comment