OTC Europe Market size was valued at USD 39,247 Million in 2024 and is projected to reach USD 60,363 Million by 2032, growing at a CAGR of 5.4% from 2026 to 2032.

Key Market Drivers:

Increasing Self-Medication Practices: There is a growing trend among consumers to manage minor health issues independently, leading to higher demand for OTC products. This trend is particularly strong among the aging population, who prefer self-treatment for chronic conditions.

Aging Population: The European Union reported that approximately 20.8% of its population was aged 65 and over in 2021, which is projected to increase. This demographic shift results in higher healthcare needs and a preference for OTC medications to manage age-

Credit Derivative Market Outlook

The global credit derivative market size was valued at approximately USD 8 trillion in 2023 and is expected to reach nearly USD 12 trillion by 2032, growing at a compound annual growth rate (CAGR) of 4.5% during the forecast period. The growth of the global credit derivative market is driven by the burgeoning need for risk management tools amidst increasing global financial uncertainties and the growing complexity of financial instruments.

One of the primary growth factors of the credit derivative market is the increasing need for risk management solutions. As financial markets become more interconnected and complex, the risk associated with credit exposure has also surged. Credit derivatives, such as credit default swaps (CDS), provide financial institutions with mechanisms to hedge against credit risk, making them indispensable tools in the modern financial landscape. The growth in corporate bond issuance and the expanding market for structured financial products further amplify the demand for credit derivatives as essential risk management instruments.

Another contributing factor is the rising demand for credit derivatives from diverse end-users, including banks, hedge funds, insurance companies, and pension funds. These institutions utilize credit derivatives for various purposes, such as enhancing portfolio returns, managing credit risk, and achieving regulatory capital relief. The growing sophistication of financial markets and the increasing prominence of non-bank financial entities have broadened the user base for credit derivatives, thereby catalyzing market growth. Additionally, the evolution of financial regulations and the need for compliance also spurs demand for credit derivatives as financial institutions seek to optimize their capital structures and manage risk exposures efficiently.

The proliferation of innovative financial instruments and technological advancements further propels the market. The development of more complex and tailored credit derivative products caters to the specific needs of various market participants. Technological innovations, such as blockchain and artificial intelligence, have enhanced the trading, settlement, and risk assessment processes associated with credit derivatives, making these instruments more accessible and easier to manage. The integration of advanced analytics and real-time data processing capabilities is also enhancing the accuracy of credit risk assessments, thereby boosting market adoption.

In addition to credit derivatives, the market for IP Derivatives is gaining traction as a novel financial instrument. These derivatives are designed to manage risks associated with intellectual property assets, such as patents and trademarks. As companies increasingly recognize the value of their intellectual property, there is a growing need to hedge against potential risks, including litigation and market volatility. IP Derivatives offer a way to transfer these risks, providing companies with a mechanism to protect their intangible assets. The development of this market is supported by the increasing sophistication of financial markets and the demand for innovative risk management solutions.

Regionally, North America holds the largest share of the credit derivative market, driven by the high concentration of major financial institutions and the early adoption of derivative products. Europe follows closely, supported by its robust financial markets and regulatory frameworks. The Asia Pacific region is anticipated to exhibit the highest growth rate due to the rapid development of financial markets, increased foreign investments, and the adoption of sophisticated financial instruments. The LATAM and MEA regions also show potential, albeit at a slower growth rate, attributed to improving financial infrastructures and growing financial market sophistication.

Product Type Analysis

The credit derivative market is segmented by product type into Credit Default Swaps (CDS), Total Return Swaps (TRS), Credit Linked Notes (CLN), Collateralized Debt Obligations (CDO), and others. Credit default swaps dominate the market due to their widespread use as a credit risk management tool. CDS allows investors to hedge against the risk of default on debt instruments, thereby providing a safety net in volatile market conditions. Their simplicity and effectiveness in transferring credit risk have made them the most popular form of credit derivative.

CDS Rates and balance sheet data for the Dutch institutions in the sample

El presente conjunto de datos contiene información de los Swaps, Cross Currency Swap y Credit default Swaps de las Pensiones Obligatorias y Cesantías paras las Sociedades Administradoras de Fondos de Pensiones y de Cesantías.

Los códigos de patrimonio corresponden a la siguiente clasificación: - Pensiones Obligatorias 1000 (Moderado), - Pensiones Obligatorias 5000 (Conservador), - Pensiones Obligatorias 6000 (Mayor Riesgo), - Pensiones Obligatorias 7000 (Retiro Programado), - Pensiones Obligatorias 8000 (Skandia Alternativo) y - Cesantías 1 (Portafolios Largo Plazo)

The article examines causal relationships between sovereign credit default swaps (CDS) prices for the BRICS and most important EU economies (Germany, France, the UK, Italy, Spain) during the European debt crisis. The cross-correlation function (CCF) approach used in the research distinguishes between causality-in-mean and causality-in-variance. In both causality dimensions, the BRICS CDS prices tend to Granger cause those of the EU counterparts with the exception of Germany. Italy and Spain exhibit the highest dependence on the BRICS, whereas only India has a negative balance of outgoing and incoming causal linkages among the BRICS. Thus, the paper underscores the signs of decoupling effects in the sovereign CDS market and also supports the view that the European debt crisis has so far had a limited non-EU impact in this market.

The FR 2436 report collects data on notional amounts and gross market values of the volumes outstanding of over-the-counter (OTC) derivatives in broad categories--foreign exchange, interest rate, equity- and commodity-linked, and credit default swaps--across a range of underlying currencies, interest rates, and equity markets.

The FR 2436 report collects data on notional amounts and gross market values of the volumes outstanding of over-the-counter (OTC) derivatives in broad categories--foreign exchange, interest rate, equity- and commodity-linked, and credit default swaps--across a range of underlying currencies, interest rates, and equity markets.

We introduce longitudinal factor analysis (LFA) to extract the common risk-free (CRF) rate from a sample of sovereign bonds of countries in a monetary union. Since LFA exploits the typically very large longitudinal dimension of bond data, it performs better than traditional factor analysis methods that rely on the much smaller cross-sectional dimension. European sovereign bond yields for the period 2006-2011 are decomposed into a CRF rate, a default risk premium and a liquidity risk premium. Our empirical findings suggest that investors chase both credit quality and liquidity, and that they price double default risk on credit default swaps.

ABSTRACT This paper investigates the drivers of long term real interest rates in Brazil. It is shown that long term yield on inflation linked bonds are driven by yields on 10 year interest rates of United States (US) government bonds and 10 year risk premium, as measured by the Credit Default Swap (CDS). Long term interest rates in Brazil were on a downward trend, following US real rates and stable risk premium, until the taper tantrum in the first half of 2013. From then onwards, real interest rates rose due to the increase in US real rates in anticipation of the beginning of monetary policy normalization and, more recently, due to a sharp increase in Brazilian risk premium. Policy interest rates do not significantly affect long term real interest rates.

Lehman Brothers, the fourth largest investment bank on Wall Street, declared bankruptcy on the 15th of September 2008, becoming the largest bankruptcy in U.S. history. The investment house, which was founded in the mid-19th century, had become heavily involved in the U.S. housing bubble in the early 2000s, with its large holdings of toxic mortgage-backed securities (MBS) ultimately causing the bank's downfall. The bank had expanded rapidly following the repeal of the Glass-Steagall Act in 1999, which meant that investment banks could also engage in commercial banking activities. Lehman vertically integrated their mortgage business, buying smaller commercial enterprises that originated housing loans, which allowed the bank to expand its MBS holdings. The downfall of Lehman and the crash of '08 As the U.S. housing market began to slow down in 2006, the default rate on housing loans began to spike, triggering losses for Lehman from their MBS portfolio. Lehman's main competitor in mortgage financing, Bear Stearns, was bought by J.P. Morgan Chase in order to prevent bankruptcy in March 2008, leading investors and lenders to become increasingly concerned about the bank's financial health. As the bank relied on short-term funding on money markets in order to meet its obligations, the news of its huge losses in the third-quarter of 2008 further prevented it from funding itself on financial markets. By September, it was clear that without external assistance, the bank would fail. As its losses from credit default swaps mounted due to the deepening crash in the housing market, Lehman was forced to declare bankruptcy on September 15, as no buyer could be found to save the bank. The collapse of Lehman triggered panic in global financial markets, forcing the U.S. government to step in and bail-out the insurance giant AIG the next day on September 16. The effects of this financial crisis hit the non-financial economy hard, causing a global recession in 2009.

Collateralized Debt Obligation Market Outlook

The global collateralized debt obligation (CDO) market is projected to experience significant growth over the forecast period from 2024 to 2032. As of 2023, the market size is valued at approximately $75 billion and is expected to reach around $150 billion by 2032, exhibiting a compound annual growth rate (CAGR) of approximately 8%. The expansion of the CDO market is fueled by a combination of financial innovation, increasing demand for diversified investment instruments, and the recovery of global financial markets after previous economic downturns. The growth is further supported by advancements in risk management technologies and a growing appetite for higher-yielding investment opportunities among institutional investors.

A significant growth factor contributing to the expansion of the CDO market is the increasing demand for structured financial products. As investors seek to optimize returns while managing risk, CDOs offer an attractive investment vehicle by pooling various types of debt instruments and redistributing the associated risk. This demand is particularly prominent among institutional investors who are keen to enhance portfolio diversification and mitigate exposure to single asset risks. Moreover, the evolution of financial markets and the introduction of innovative CDO structures have broadened the scope and appeal of these instruments, promoting further market growth.

The resurgence of corporate debt issuance is another pivotal factor driving the CDO market. With companies across the globe seeking to leverage favorable interest rates and conditions to raise capital, there is a significant increase in the availability of corporate debt, which serves as a primary underlying asset for CDOs. This trend is supported by a robust global economic environment and the need for businesses to finance growth, mergers and acquisitions, and other strategic initiatives. As a result, the surge in corporate debt issuance creates a conducive environment for the proliferation of CDOs, which package these debts into marketable securities.

Technological advancements in financial services also play a crucial role in the growth of the CDO market. Enhanced data analytics, machine learning, and artificial intelligence applications have revolutionized the way financial products are structured, marketed, and managed. These technologies facilitate improved risk assessment, credit analysis, and pricing models for CDOs, making them more attractive to investors. Additionally, the increased transparency and efficiency brought about by technology encourage participation from a wider range of market players, further driving the demand and market size of CDOs.

Regionally, the North American market continues to dominate the CDO landscape, driven by a mature financial sector and high levels of institutional investment activity. However, significant growth is anticipated in the Asia Pacific region due to rapid economic development, increasing financial market sophistication, and rising demand for diversified investment instruments. Europe also presents promising opportunities, supported by the stabilization of its financial systems post-crisis and increasing regulatory clarity. Although the Middle East & Africa and Latin America currently represent smaller market shares, these regions are expected to witness gradual growth owing to economic diversification efforts and expanding financial sectors.

Type Analysis

The CDO market can be segmented by type into asset-backed CDOs, synthetic CDOs, and structured finance CDOs, each with distinct characteristics and market dynamics. Asset-backed CDOs, which are backed by a pool of loans, bonds, or other financial assets, have historically been the most prevalent type within the market. These instruments appeal to investors by offering a combination of predictable cash flows and risk diversification. The demand for asset-backed CDOs remains robust due to the continued availability of diverse underlying assets and the appeal of a structured investment that can be tailored to meet specific risk/return profiles.

Synthetic CDOs, which use credit default swaps and other derivatives instead of owning physical assets, have gained traction due to their flexibility and potential for higher yields. These instruments allow investors to take on specific risk exposures without the need to directly hold the underlying assets, making them attractive for sophisticated investors and those seeking to hedge existing portfolio risks. The synthetic CDO market is expected to grow as financial markets evolve and investo

In March 2003, banks and selected Registered Financial Corporations (RFCs) began reporting their international assets, liabilities and country exposures to APRA in ARF/RRF 231 International Exposures. This return is the basis of the data provided by Australia to the Bank for International Settlements (BIS) for its International Banking Statistics (IBS) data collection. APRA ceased the RFC data collection after September 2010.

The IBS data are based on the methodology described in the BIS Guide on International Financial Statistics (see http://www.bis.org/statistics/intfinstatsguide.pdf; Part II International banking statistics). Data reported for Australia, and other countries, on the BIS website are expressed in United States dollars (USD).

Data are recorded on an end-quarter basis.

All banks operating in Australia complete ARF 231. Between March 2003 and September 2010, only those larger RFCs with sizeable overseas assets and/or liabilities completed RRF 231. Bank and RFC positions are reported in Australian dollars (AUD). Non-AUD denominated positions have been converted to AUD using an appropriate end-quarter exchange rate, so changes in reported data between quarters are due not only to changes in positions but also valuation gains or losses due to exchange rate changes.

There are two sets of IBS data: locational data, which are used to gauge the role of banks and financial centres in the intermediation of international capital flows; and consolidated data, which can be used to monitor the country risk exposure of national banking systems. Only consolidated data are reported in this statistical table.

The data in this statistical table summarise the country exposures of Australian-owned banks (and selected RFCs between March 2003 and September 2010). This is a smaller reporting pool than in the series reported in statistical table B11.2, which is based on all banks and RFCs reporting ARF/RRF 231 data. The types of assets included here are consistent with those reported in statistical tables B11.1, B11.2 and B12.1, except that the data are consolidated for Australian-owned reporting entities (i.e. includes the claims on countries of all the offices worldwide of entities with head offices in Australia, but excludes positions between different offices of the same group). Consolidated data only include positions with non-residents (in any currency).

Data are shown for a selected group of countries that account for the bulk of the total. Similar data for other countries are also available in statistical table B13.2.1.

Data presented in this statistical table are ultimate risk claims. Ultimate risk claims cover claims on an immediate counterparty location basis that have been adjusted (via guarantees and other risk transfers) to reflect the location of the ultimate counterparty/risk. Data on immediate risk claims (expressed by the BIS as claims on an immediate borrower basis) are available in complementary statistical tables B13.1 and B13.1.2.

Foreign claims refers to all cross-border claims plus foreign offices’ local claims on residents in both local and foreign currencies. It is equal to the addition of local currency claims of reporting entities’ foreign offices on local residents, and international claims. Data for all these accounts on an immediate risk basis are available in a complementary statistical table B13.1.

International organisations are included in the ‘Public sector’ category in the consolidated data (while in the locational data they can be reported as either bank or non-bank depending on the particular organisation). Official monetary authorities (central banks or similar national and international bodies, such as the BIS) are also included in the public sector in the consolidated data (but are treated as banks in the locational data, B12.1 and B12.2). Publicly-owned entities (other than banks) are classed in the ‘Non-bank private sector’ in the consolidated data (and as non-banks in the locational data).

‘Cross border’ positions are those positions with bank and non-bank counterparties located in a country other than the country of residence of the reporting entity (or its affiliate). This would include, for example, lending by a bank in Australia to a company in France; it would also include loans by that bank’s subsidiary in the UK to a company in France.

‘Local’ claims are those claims of overseas affiliates of the reporting entity on the residents of the countries in which they are located. These are largely in local currencies but include non-local currencies as well.

Derivatives are not included in foreign claims. On- and off-balance sheet derivatives are shown separately as a memo item. ‘Derivatives’ are those on- and off-balance sheet derivative exposures (to the country of ultimate risk) that are in a positive market value position. Negative market values of derivative contracts represent financial liabilities and are therefore excluded from the reporting of financial claims. The data mainly comprise forwards, swaps and options relating to foreign exchange, interest rate, equity, commodity and credit derivative contracts. Credit derivatives, such as credit default swaps and total return swaps, are included in ‘Derivatives’ if they belong to the trading book of a protection-buying reporting entity. Credit derivatives that belong to the banking book are reported as risk transfers by the protection buyer. All credit derivatives are reported as guarantees by the protection seller.

‘Guarantees’ refers to contingent liabilities arising from an irrevocable obligation to pay to a third-party beneficiary when a client fails to perform some contractual obligations. They include: secured, bid and performance bonds; warranties and indemnities; confirmed documentary credits; irrevocable and stand-by letters of credit; acceptances; and endorsements. Guarantees also include the contingent liabilities of the protection seller of credit derivative contracts.

‘Credit commitments’ covers arrangements that irrevocably obligate an institution, at a client’s request, to extend credit in the form of: loans; participation in loans, lease financing receivables, mortgages, overdrafts or other loan substitutes; or commitments to extend credit in the form of the purchase of loans, securities, or other assets (e.g. back-up facilities including those under note issuance and revolving underwriting facilities).

Explore the growth potential of Market Research Intellect's Triennial Otc Derivatives Market Report, valued at USD 1.2 trillion in 2024, with a forecasted market size of USD 1.8 trillion by 2033, growing at a CAGR of 5.2% from 2026 to 2033.

Graph and download economic data for ICE BofA BB US High Yield Index Option-Adjusted Spread (BAMLH0A1HYBB) from 1996-12-31 to 2025-07-10 about BB, option-adjusted spread, yield, interest rate, interest, rate, and USA.