Let me continue with some examples of market-specific indicators. This chart [see slide 12] shows the notional amounts of nominal outstanding interest rate derivatives, that is, forward rate agreements, options, and swaps, by currency. By using derivatives, market participants can better manage risks, lock in the future price of the underlying assets and even alter the terms of the underlying financial contract.
As a consequence, the allocation of capital and risk across time and space is improved. The chart clearly shows that the most active interest rate derivative markets are those denominated in euro and in the US dollar, with outstanding amounts in 2006 of 86 and 75 trillion euro, respectively.