Most big trades between the world's largest banks and customers in the $442 trillion interest-rate swap market are hedged within 30 minutes of the transaction, according to the Federal Reserve Bank of New York.

Researchers at the Fed analyzed three months of interest-rate derivative market information for a study released today on how public price reporting may affect trading in the instruments. The report found that the 14 largest banks offset their trades within half an hour about 60 percent of the time. That contrasts with hedging in the credit-default swap market, because banks can hedge risk in rates more easily, the report said. Delays in reporting large trades are being debated by U.S. regulators to offer time for banks to offset the risk they take.

The finding “appears to highlight a significant contrast to the credit-default swap market, where earlier published analysis found little evidence of large customer trades being offset through subsequent trading on the same or next day,” the central bank study said. “Our findings suggest that introducing a public price reporting regime may not disrupt hedging activity in interest-rate swaps as long as there are meaningful protections that delay reporting or mask trade sizes.”