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

Researchers at the Fed analyzed three months of interest-ratederivative market information for a study released today on howpublic price reporting may affect trading in the instruments. Thereport found that the 14 largest banks offset their trades withinhalf an hour about 60 percent of the time. That contrasts withhedging in the credit-default swap market, because banks can hedgerisk in rates more easily, the report said. Delays in reportinglarge trades are being debated by U.S. regulators to offer time forbanks to offset the risk they take.

The finding “appears to highlight a significant contrast to thecredit-default swap market, where earlier published analysis foundlittle evidence of large customer trades being offset throughsubsequent trading on the same or next day,” the central bank studysaid. “Our findings suggest that introducing a public pricereporting regime may not disrupt hedging activity in interest-rateswaps as long as there are meaningful protections that delayreporting or mask trade sizes.”