Publications:
Quarterly Derivatives Fact Sheet -- Fourth Quarter 1997
Read Section: General.......Risk.......Revenue.....High-risk Mortgage Securities and Structured Notes
REVENUES
The Call Report data include revenue information regarding trading activities involving cash
instruments and off-balance sheet derivative instruments. The data also show the impact on net
interest income and non-interest income from derivatives used in non-trading activities. Note
that the revenue data reported in Table 7.
Relative to the third quarter of 1997, commercial banks reporting derivatives contracts in the
fourth quarter of 1997 show an aggregate decrease in trading revenues from cash instruments and
derivatives activities of $1.2 billion, or 52 percent. The revenue figures reported for trading
activities in the fourth quarter indicate that the banks with derivatives realized approximately
$1.2 billion in revenue from cash instruments and off-balance sheet derivatives, with the top
eight banks accounting for 59 percent of these trading revenues. In the fourth quarter, revenues
from interest rate positions decreased by $639 million, generating $534 million, while revenues
from foreign exchange positions increased by $211 million, to $1.3 billion. Banks reported
trading losses of $625 million from trading activities involving equity, commodity and other (i.e.
emerging market debt) positions in the fourth quarter. [See Table 7.]
Derivatives held for purposes other than trading did not have a significant impact on either net
interest income or non-interest income in the fourth quarter. Non-traded derivatives contributed
$78 million, or .09 percent to the gross revenues of banks with derivative contracts in the fourth
quarter. These figures reflect an increase of $106 million from the third quarter. These results
are only useful in the context of a more complete analysis of each bank's asset/liability structure
and management process.
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High-risk Mortgage Securities and Structured Notes
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