BIS Financial Transaction Data for 2022 - $18.1 quadrillion

Sorry it took me so long. Every year, I have a look at the data provided by the Bank for International Settlements which publishes data on Financial Market Infrastructures and Critical Service Providers for a set of 24 countries. It allows me to come up with a minimum value for Financial Transactions in those Countries. 

The relevant tables are the following. 

PS3 : Payments processed by selected payment systems: value of transactions

CSD3 : Transactions processed by selected central securities depositories: value of delivery instructions

CCP3 : Transactions cleared by selected central counterparties and clearing houses: value of contracts and transactions

CT8: Use of payment services/instruments: value of cashless payments by instrument type

CT8G: Use of payment services/instruments: value of fast payments 

Click on any of the links, and you can select any year  from 2012-2022, and there's a Export option to download the data. 

I've compiled the data into a Google sheet, and simply added together all the different values to get a total of $18.1 quadrillion for 2022 - up 13.2% on the figure I got for 2021 ($15.9 quadrillion), and 71.5% higher than in 2012. 

Here's a table of which countries are responsible for most of the transactions. 

 

The United States is responsible for over $4.7 quadrillion (26%) of the total, but the UK is no slouch,  with over $2 quadrillion. The third player, CLS (for Continuous Linked Settlement) is an operator that doesn't really have a localisation, but which does an enormous amount of Foreign Exchange trading in a range of currencies. I was surprised to see that Canada is responsible for over 8.2% of the transactions, up from 1.9% the previous year. They are followed by Japan which has stayed steady. China was second last year with 12.8% of the trading, and has dropped down to number six. So quite what happened there is unclear. 

It's interesting to look at the really big players. The following table lists all that individually processed over $100 trillion a year. 

Five players each managed to do more than a quadrillion dollars worth of transactions in 2022. Top of the list is the US based Government Securities Division (GSD) of the Fixed Income Clearing Corporation (FICC). They are followed by CLS and the UK based LCH.Clearnet Ltd. But number 4 is the relatively new Canadian HVPS (High Value Payment System) followed by the other big US based player - Fedwire Funds Service, operated by the Federal Reserve. 

$18.1 quadrillion is an eye-watering number but it is very definitely an under-estimate. Despite my pleas, BIS's list of "selected' central depositories, clearing systems and payment systems continues to ignore the existence of the Chicago-based Options Clearing Corporation, which single handedly cleared an astonishing 11,110,241,235 deals in 2023, up 7% on the previous years total. 

I've not been able to find out the value of an average OCC trade, but I wouldn't be surprised if they are typically around $1 million. If so, you can probably add another $11 quadrillion to the annual total. 

 Now, let's see. A 0.01% Financial Transaction Tax on $30 quadrillion could generate $3 trillion a year. You could do a lot of good with that amount of money

It's also interesting to note that while BIS only provides data for 24 countries, an increasing number of central banks are switching to what are known as Real-time Gross Settlement (RTGS) systems. In the past, clearing houses would accumulate trades during the day, and only settle up at the end of the day. That carried a certain risk. With RTGS based operations, all transactions are done in real time, and so are easier to log. The first such system was the Fedwire, introduced by the Federal Reserve in 1970. The UK introduced the Clearing House Automated Payment System (CHAPS)  in 1984, at the same time that France introduced its own SAGITTAIRE system. But today, RTGS systems are used by central banks in  around 90 different countries. This should make it much easier to get a more complete picture of financial transactions at the global level.  For example, Egypt's RTGS system handled $3.61 trillion in 2023. I've not managed to find figures for all the other countries, but they presumably exist somewhere.