Dec 19 The Commodity Futures Trading Commission
(CFTC) said the size of the overall swaps market was understated
in the weekly reports it began publishing last month, due to
technical errors at two swaps data repositories that are
responsible for maintaining market data.
The error in the swaps data highlights the challenges
confronting the CFTC, which has been put in charge of the swaps
markets and is trying to usher in transparency into what was
once an opaque market.
The Depository Trust & Clearing Corp, the largest data
repository, informed the agency that the notional values in the
interest rate asset class have been understated due to a
technical coding issue, CFTC said in its weekly swaps report.
The U.S. derivatives regulator also reported a processing
error by another repository managed by the CME Group Inc
, whose figures were not included in the table for
interest rate swaps published on Dec. 18. ()
The swaps reports published by the CFTC aggregate swap
transaction data from the repositories. The data reflects
pricing information as well as the notional value of the
contracts, bringing transparency to a market that was the center
of a financial crisis five years ago.
The agency told the Wall Street Journal, which first
reported the news, that it is reviewing the matter and hopes to
have firmer figures by next week's report, due Thursday.
Reuters could not immediately determine the extent of the
A CFTC official familiar with the matter told the Journal
that the discrepancy could be as high as $55 trillion, though
another official told the newspaper the figure is closer to $10
trillion once regulators cancel out certain transactions to
prevent double counting. ()
The CFTC estimates the size of the gross notional value of
the swaps market at about $390 trillion.
CFTC could not immediately be reached for comment by Reuters
outside of regular U.S. business hours.