The Office of the Comptroller of the Currency or OCC said that U.S. commercial banks reported trading revenues of $1.9 billion in the fourth quarter, sharply down 66% from $5.7 billion in the third quarter. Fourth-quarter trading revenue, which is usually the lowest in a year on a seasonal pattern, also suffered from changes in the credit adjusted value of derivatives payables and receivables.
OCC noted that the uncertainty in the fourth quarter over potential legislative changes to the derivatives market hampered client demand beyond the normal seasonal effect.
Also, OCC stated that the net effect of changes to the credit-adjusted fair values of derivatives payables and receivables adversely impacted trading revenues.
For the full year of 2009, commercial bank trading revenues totaled $22.6 billion. In 2008, bankshad reported their first ever annual trading loss of $836 million. OCC stated that the previous high was in 2006 when banks generated $18.8 billion of trading revenue.
Combined interest rate and foreign exchange revenues dropped 65% to $1.4 billion in the fourth quarter from $3.9 billion in the third quarter.
Exposures in the contracts remained highly concentrated, with the largest 5 banks continuing to account for 97% of overall exposure and 88% of net credit exposure, the OCC said.
Fourth-quarter credit trading generated only $27.0 million versus $1.2 billion in the sequential quarter. In addition, equity contracts amounted to $144.0 million, a slight decline from $154.0 million in the third quarter. Credit derivatives grew 8% in the fourth quarter to $14.0 trillion.
As of December 31, total derivatives exposures stood at $78.55 trillion for JPMorgan Chase Bank (JPM), $44.31 trillion for Bank of America (BAC), $41.6 trillion for Goldman Sachs Bank (GS), $37.55 trillion for Citibank National and $4.18 trillion for Wells Fargo Bank NA (WFC).
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.