Magazine article American Banker

Swaps Delinquency Rate Low in 1Q; More-Frequent Reporting Is Urged

Magazine article American Banker

Swaps Delinquency Rate Low in 1Q; More-Frequent Reporting Is Urged

Article excerpt

WASHINGTON -- Deliquencies were a tiny fraction of the enormous derivatives market in the three months ending March 31, the first period in which this information was required by regulators.

Just $24.3 million of $13.9 trillion in outstanding derivative contracts were 90 days or more past due on March 31, according to Veribanc, a bank rating and research firm in Wakefield, Mass.

Using first-quarter data released June 24 by the Federal Reserve, Veribanc figured the industry's involvement in derivatives, mutual funds, and annuities.

The data may bolster the financial services industry's case that new laws are not needed in the derivatives area. However, Mr. Heller warned in an interview Tuesday that the data may already be outdated.

Reporting Changes Urged

"This is as of March 31. With what the markets have been doing over the last week, the situation may have changed," he said. Mr. Heller recommended more frequent reporting to help regulators keep track of the fast-changing markets.

Also newly reported in the first quarter were mutual fund and annuities sales by banks.

In the three months ending March 31, 1,928 banks sold $109.1 billion in mutual funds. Bank of America, San Francisco, State Street Bank, Boston, and Bankers Trust of New York led the industry each selling more than $10 million in mutual funds during the first quarter.

Citibank Led Annuities Sales

Annuities sales totaled $1.9 billion in the first quarter. Citibank led with $157 million in annuities sales and Bank of America was second with $136 million, according to Veribanc.

Income from mutual funds and annuities totaled $310 million in the first quarter, Veribanc said. These fees are aggregated on the Call Report, so Veribanc could not break down the income according to investment product.

Five banks led the industry in earnings from mutual funds and annuities during the first quarter: Bank of America, $24 million; Citibank, $24 million; Wells Fargo Bank, $21 million; PNC National Bank, $15 million; and Bank of New York, $13 million. …

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