BIS ‘financial risk’ on $65 trillion of derivatives debt

The Bank for International Settlements said financial risks were inherent in $65 trillion of off-balance sheet derivative debt.
A report titled 'Huge, Missing and Growing' by the Bank for International Settlements (BIS) said that "lack of information is making it harder for policymakers to predict the next financial crisis". They raised concerns that the debt was not being recorded on the balance sheet because of the rules,” Bloomberg reported on the 5th.

Bloomberg said on the day, “According to the BIS, the central bank of central banks, as of June of this year, the value of hidden dollar debt off the balance sheets of non-U.S. banks and shadow banks was $65 trillion,” adding, “Since the 2008 financial crisis, almost two It is growing rapidly,” he reported.
The BIS estimates that the $65 trillion in debt held by non-U.S. institutions through currency derivatives is more than 2.5 times the total U.S. Treasury market, the world's largest, and 14% of the value of all financial assets worldwide.

The BIS report said, “The borrowings that are not visible in the short term expand while unknown whereabouts of borrowings by pension funds and other derivatives, such as foreign exchange swaps, form part of large-scale debts.” “The stress of dollar financing in both crises has forced central banks to intervene to support debtors,” he said.

“It is unclear even how many analysts are aware of the existence of large off-books liabilities,” the report said. The lack of information on dollar debt puts policy makers at a disadvantage.”
According to BIS statistics on household debt in each country this year, Korea recorded 2,245 trillion won, rising from 10.5.4% (relative to GDP) in the first quarter to 105.6% in the second quarter.
Korea's household debt has nearly doubled in the 10 years from 2013 to this year.
Korea's BIS-based household debt ratio is the third highest among 43 countries.
On the Fed's rate hike, "Fed officials have hinted at a plan to raise the benchmark rate by 0.5 percentage points at their next meeting, but a report from the Labor Department in November may continue to raise rates higher than currently expected as wage pressures rise," he said. The Wall Street Journal reported on the 6th.
The U.S. Department of Labor wage report showed that average hourly earnings for the three months through November increased by 5.8% per year, up 1.9% from the “average annual increase of 3.9% for three months” in October.
The WSJ, in the title of <Fed's interest rate hike burden next year and slowing this month>, "Because of brisk wage growth, officials may consider raising the policy rate to more than 5% in 2023 if they approve a 0.5p increase in December." He predicted the era of interest rates above 5% in the US.<Derivatives ‘Risk’ as JPY 147 plunges on US inflation, see October 14, 2022>