OCC Q1 Report on Bank Derivatives Activities (pdf). Click to enlarge. The pdf is rather instructive. Take a peek. Maturity of these contracts range 2 mo - 5 years.
Notice Wells Fargo-Wachovia combined exposure is tiny be comparison (< 1%) to the top 3 "core banks." That's good and bad headline news. On one hand, derivatives trading was 4% of Wachovia gross Q1 and trending higher Q2. On the other, combined, the merger may be insufficiently capitalized to settle. Could be their positions net zero, everyone goes home relieved though.
Migeru posted an article here about notional value. Diversity is the key to economic and political evolution.
While bank supervisors normally have concerns about market or product concentrations, there are three important mitigating factors with respect to derivatives activities. First, there are a number of other providers of derivatives products, such as investment banks and foreign banks, whose activity is not reflected in the data in this report. Second, because the highly specialized business of structuring, trading, and managing derivatives transactions requires sophisticated tools and expertise, derivatives activity is appropriately concentrated in those institutions that have made the resource commitment to be able to operate this business in a safe and sound manner. Third, the OCC has examiners on-site at the largest banks to continuously evaluate the credit, market, operation, reputation and compliance risks of derivatives activities.
