Growth in the over-the-counter OTC derivatives market slowed in the second half of 2006 to a pace in line with the long-term
average rate of increase of the market. Notional amounts of all types of OTC contracts rose by 12% to $415 trillion at the end of
December (Table 1), after a 24% increase in the first half of the year. Growth remained very strong in the credit segment, where the
notional amounts of outstanding credit default swaps (CDSs) increased by 42%, but it fell to rates in the range of 5–11% in other risk
categories. Gross market values, which measure the cost of replacing all existing contracts and thus represent a better measure of
risk at a given point in time than notional amounts, remained roughly stable at $10 trillion at the end of December 2006. Gross credit
exposures due to OTC derivatives, after netting agreements, were also stable at $2 trillion.