The Office of the Comptroller of the Currency reported that the trading revenue of U.S. banks increased to $6 billion in the fourth quarter of 2016. This represented an increase of $1.7 billion over revenue in the fourth quarter of 2015. According to the Report, the largest driver of the year-over-year revenue spike was foreign exchange and interest rate trading, with the latter benefiting from the rise in U.S. Treasury rates.
The Report also showed that derivative notional amounts decreased in the fourth quarter of 2016 by $12.3 trillion, or 6.9 percent, to $165.2 trillion. Derivative contracts remained concentrated in interest rate products, which represented 75.3 percent of the total derivative notional amounts.
The analysis was based on call report data provided by insured U.S. commercial banks and savings associations, reports filed by U.S. financial holding companies, and other published data.
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