Derivatives Exposure Soars at Big U.S. Banks

September 16, 2003

As of June 30, 2003, J.P. Morgan Chase led the known universe with $33.3 trillion in reported derivatives, an increase of $4.5 trillion since the end of 2002, and an annualized increase of 31%.

Second place in this dubious sweepstakes goes to Bank of America, with $14.3 trillion, up $1.8 trillion since the end of 2002 for an annualized increase of 29%.

Third was Citigroup, the derivatives holdings of which rose 30% to $13.0 trillion, an annualized rate of 59%.

Morgan Chase led the pack in credit derivatives as well, with $460 billion, an annualized increase of 51%; followed by Citigroup with $152 billion, 30%; and Bank of America, with $123 billion, an annualized increase of over 67%.

These three institutions alone have $57 trillion of the $69.3 trillion in derivatives reported by the top 25 bank holding companies.

Wachovia had $2.5 trillion, Bank One had $1.2 trillion and HSBC North America had $1.1 trillion; no other banks hit the trillion- dollar mark.

By way of comparison, the U.S. commercial banking system had $33.4 trillion in derivatives as of mid-1998.

[Source: Comptroller of the Currency, Sept. 2003]