What is a Credit Default Swap?
A credit default swap (CDS) is a financial derivative contract that functions much like insurance against default — one party pays a periodic premium to another in exchange for protection if a borrower, corporation, or government fails to meet its debt obligations. In the United States, CDS contracts remain a core tool used by banks, hedge funds, insurance companies, and asset managers to hedge credit risk on everything from single corporate bonds to broad market indexes tracking hundreds of investment-grade and high-yield issuers. By 2026, the US CDS market has evolved considerably from its pre-financial-crisis form, shaped by mandatory central clearing, tighter dealer capital requirements, and a Depository Trust & Clearing Corporation (DTCC) trade reporting regime that gives regulators far more visibility into who holds what exposure than existed before 2008.
Despite the market’s dramatic post-crisis contraction in outstanding notional value, credit derivatives activity among US banks has actually been reaccelerating through 2025 and into 2026, driven by renewed hedging demand tied to elevated interest rates, corporate credit stress in select sectors, and growing use of index CDS products like CDX for portfolio-level risk management. Understanding today’s credit default swap statistics requires separating several distinct measures: the global and US-specific market size figures tracked by research firms, the notional amounts outstanding reported by US banks to the Office of the Comptroller of the Currency (OCC), and the traded notional volumes published quarterly by the International Swaps and Derivatives Association (ISDA). This report walks through every major figure behind the US CDS market in 2026, from market size and bank exposure to central clearing rates and dealer concentration risk.
Interesting Facts About Credit Default Swaps in the US 2026
| Metric | Figure |
|---|---|
| Global CDS market size (2026) | $9,513.07 billion |
| Projected global CDS market size (2034) | $15,741.14 billion (6.5% CAGR) |
| US bank credit derivatives notional (Q1 2026) | $6.7 trillion |
| Quarter-over-quarter growth in US credit derivatives (Q1 2026) | +$1.6 trillion (32.0%) |
| Credit default swaps as share of all credit derivatives (Q1 2026) | $5.2 trillion (78.0%) |
| Total US bank derivative notional, all types (Q1 2026) | $296.5 trillion |
| Four largest US banks’ share of total derivatives notional | 79.1% |
| Global CDS notional outstanding, peak (2007) | ~$60 trillion |
| Global CDS notional outstanding (2023, post trade compression) | ~$10 trillion |
| Security-based credit derivatives traded notional, H1 2026 (ISDA) | $375.7 billion |
Source: Office of the Comptroller of the Currency (OCC), International Swaps and Derivatives Association (ISDA), Fortune Business Insights, European Systemic Risk Board (ESRB)
As a content writer breaking down these numbers, the most important thing to understand is that CDS market size and CDS notional outstanding are measuring two very different things. The $9,513.07 billion global market size figure reflects the total economic footprint of the CDS industry as tracked by market research analysts, while the notional outstanding figures reported to regulators — like the $6.7 trillion in US bank credit derivatives — represent the face value of contracts on the books, a number that determines potential payout exposure rather than actual capital at risk.
What’s especially notable in the 2026 data is the sharp rebound in US bank credit derivatives activity, which jumped 32.0% in a single quarter to reach $6.7 trillion, with credit default swaps making up 78.0% of that total. This resurgence comes after years of post-2008 deleveraging pushed the global CDS notional down from a staggering $60 trillion peak in 2007 to roughly $10 trillion by 2023 — a decline driven far more by trade compression techniques that eliminate offsetting contracts than by any actual reduction in credit-hedging activity, which explains why volumes are climbing again even as the market remains a fraction of its pre-crisis size.
Credit Default Swap Market Size Statistics in the US 2026
| Metric | Figure |
|---|---|
| Global CDS market size (2026) | $9,513.07 billion |
| Global CDS market size (2034, projected) | $15,741.14 billion |
| Global CAGR, 2026-2034 | 6.5% |
| North America CDS market CAGR (2026-2035) | 5.37% |
| US CDS market size (2025) | $2.87 billion |
| US CDS market size (2035, projected) | ~$4.87 billion |
Source: Fortune Business Insights, Precedence Research
Market size projections from independent research firms show the global credit default swap industry continuing to expand steadily through the end of the decade, growing from $9,513.07 billion in 2026 to a projected $15,741.14 billion by 2034, a compound annual growth rate of 6.5%. This growth trajectory reflects rising institutional demand for structured credit-risk management tools, expanded transparency initiatives like ISDA’s SwapsInfo database expansion to cover European CDS trading activity, and deepening analytics and advisory capabilities that banks are building out to support clients through volatile credit cycles.
It’s worth being precise about what the US-specific $2.87 billion (2025) market size figure actually represents — this is a research-firm calculation of the CDS industry’s addressable market value in the United States specifically, distinct from the multi-trillion-dollar notional amounts outstanding that regulators track. North America continues to dominate the broader global CDS landscape due to its mature regulatory environment, deep liquidity pools, and concentration of major dealer banks and hedge funds, with the region maintaining the highest share of any geography heading into 2026 even as growth rates in the North American segment (5.37% CAGR) run slightly behind the global average.
US Bank Credit Derivatives Notional Statistics in 2026
| Quarter | Total Credit Derivatives Notional | CDS Share |
|---|---|---|
| Q1 2025 | $5.1 trillion | — |
| Q3 2025 | $5.8 trillion | 80.2% ($4.7 trillion) |
| Q1 2026 | $6.7 trillion (+32.0% QoQ) | 78.0% ($5.2 trillion) |
| Net purchased credit protection (Q1 2025) | $2.7 trillion (98 banks) | — |
| Insured US banks holding derivatives (Q1 2026) | 1,192 institutions | — |
| Four largest banks’ share of total derivative notional (Q1 2026) | 79.1% | — |
Source: Office of the Comptroller of the Currency (OCC), Quarterly Report on Bank Trading and Derivatives Activities
The OCC’s Quarterly Report on Bank Trading and Derivatives Activities shows US bank credit derivatives notional climbing sharply in early 2026, reaching $6.7 trillion in the first quarter — a jump of $1.6 trillion (32.0%) from the prior quarter, with credit default swaps remaining the dominant product at $5.2 trillion, or 78.0% of all credit derivatives. This growth continues a pattern visible throughout 2025, when notional climbed from $5.1 trillion in Q1 to $5.8 trillion by Q3, reflecting banks actively rebuilding credit-hedging books after years of relatively muted activity.
Despite this growth, credit derivatives remain a small fraction of the $296.5 trillion in total derivative notional held by US banks in Q1 2026, with interest rate products dominating at 68.5% of the total. What stands out most in the underlying data is the extreme concentration of this market: just four large banks hold 79.1% of the entire US banking industry’s derivative notional across all product types, meaning the health and risk management practices of a handful of major dealers — typically JPMorgan Chase, Goldman Sachs, Citigroup, and Bank of America — effectively determine the systemic risk profile of the entire domestic CDS market. Anyone researching how this concentrated credit exposure interacts with broader consumer and corporate debt trends may find our Consumer Debt Statistics in US report useful additional context.
Credit Default Swap Trading Volume Statistics in the US 2026
| Metric (ISDA SwapsInfo) | Figure |
|---|---|
| Security-based credit derivatives traded notional, H1 2026 | $375.7 billion (+0.9% YoY) |
| Trade count, H1 2026 | 103.5 thousand (-3.0% YoY) |
| Index credit derivatives traded notional growth, Q1 2026 | +39.8% YoY |
| Corporate single-name CDS traded notional (recent quarter) | -3.1% (trade count -6.5%) |
| Sovereign single-name CDS traded notional (recent quarter) | +19.8% (trade count +17.2%) |
| Interest rate derivatives traded notional, Q1 2026 | $174.0 trillion (+38.1% YoY) |
Source: International Swaps and Derivatives Association (ISDA), SwapsInfo First Half of 2026 Review
ISDA’s SwapsInfo data shows overall trading activity in credit derivatives holding roughly steady in aggregate dollar terms through the first half of 2026, with security-based credit derivatives traded notional reaching $375.7 billion, up a modest 0.9% year-over-year, even as trade count declined 3.0% to 103.5 thousand — a pattern indicating fewer, larger trades rather than a genuine slowdown in market participation. The composition of that activity shifted meaningfully beneath the surface: index credit derivatives trading, driven by strong flows into products like CDX Investment Grade, surged 39.8% in the first quarter of 2026 alone.
That index-driven growth stands in sharp contrast to the single-name CDS segment, where corporate single-name CDS traded notional fell 3.1% with trade counts down 6.5%, while sovereign single-name CDS activity moved in the opposite direction, climbing 19.8% in notional and 17.2% in trade count. This divergence reflects a broader structural shift in how market participants use CDS today: rather than betting on or hedging individual corporate names one at a time, institutional investors increasingly prefer index products for efficient, liquid portfolio-level credit exposure, reserving single-name trades for more targeted sovereign risk positioning or idiosyncratic corporate credit events.
Credit Default Swap Central Clearing Statistics in the US 2026
| Clearing Metric | Figure |
|---|---|
| Share of total CDS traded notional centrally cleared | 64.2% |
| Primary US CDS clearinghouse | ICE Clear Credit (ICC) |
| ICC regulatory status | CFTC-registered DCO, SEC-registered SCA, FSOC-designated SIFMU |
| Credit derivative transactions centrally cleared (Q1 2025 estimate) | 30.0% |
| ICC launch year | March 2009 (as ICE Trust U.S. LLC) |
| Global CDS single-name market covered by DTCC bilateral data sample | 31.5% |
Source: ICE Clear Credit LLC Disclosure Framework, ISDA SwapsInfo, Depository Trust & Clearing Corporation (DTCC)
Central clearing has become the structural backbone of the modern US CDS market, with 64.2% of total traded notional now routed through central counterparties rather than settled bilaterally between dealers — a dramatic shift from the pre-2008 era when virtually all CDS trading happened over-the-counter with no centralized risk backstop. ICE Clear Credit, based in the United States, stands as the dominant clearinghouse for North American CDS contracts, registered simultaneously with the CFTC as a Derivatives Clearing Organization and with the SEC as a Securities Clearing Agency, while also carrying a Financial Stability Oversight Council designation as a systemically important financial market utility.
The push toward mandatory clearing, which began in earnest following the 2010 Dodd-Frank Act, was designed specifically to reduce the kind of opaque, interconnected counterparty risk that made AIG’s CDS exposure a central flashpoint of the 2008 financial crisis. While clearing rates have climbed substantially since ICC’s 2009 launch, it’s worth noting that clearing statistics can vary depending on whether inter-dealer positions that get novated to central counterparties are adjusted for potential double-counting, meaning the true economic reduction in bilateral counterparty risk, while significant, is somewhat more modest than the headline clearing percentage might initially suggest.
Credit Default Swap Market Concentration and Risk Statistics in the US 2026
| Risk Metric | Figure (Q1 2026) |
|---|---|
| Net current credit exposure (NCCE), all US banks | $325 billion (+34.8% QoQ) |
| Increase in NCCE, Q4 2025 to Q1 2026 | +$84.1 billion |
| Cumulative trading revenue, US banks (Q1 2026) | $16.3 billion |
| Trading revenue growth vs. Q4 2025 | +11.4% |
| Trading revenue growth vs. Q1 2025 | +5.6% |
| Historical market-implied US default probability (2023 debt ceiling episode) | ~4% |
Source: Office of the Comptroller of the Currency (OCC), Federal Reserve Bank of Chicago
Net current credit exposure (NCCE) — the metric regulators use to track actual counterparty risk after accounting for legal netting agreements — jumped 34.8% to $325 billion in the first quarter of 2026, an increase of $84.1 billion in just one quarter. This kind of exposure growth typically tracks closely with rising notional volumes and market volatility, and it coincided with a healthy $16.3 billion in cumulative bank trading revenue for the quarter, up 11.4% from the previous quarter and 5.6% higher than the same period a year earlier, suggesting that credit derivatives desks are both taking on more risk and generating more profit from that activity simultaneously.
Historical episodes offer useful context for how CDS pricing functions as a real-time market signal during periods of acute credit stress. During the 2023 US debt ceiling standoff, sovereign CDS spreads on US Treasury obligations implied a market-estimated default probability of roughly 4%, a level below the panic seen in 2011 but notably above ordinary baseline readings, illustrating how actively traders use the CDS market to price in tail risks around events like government funding fights — a dynamic that remains directly relevant heading into any future debt ceiling or fiscal standoff in 2026 and beyond. For readers tracking how corporate financial distress feeds into these credit markets, our Business Bankruptcy Statistics in US report offers useful complementary data on the underlying default trends CDS contracts are designed to hedge against.
Historical Credit Default Swap Market Decline Statistics in the US 2026
| Year | Global CDS Notional Outstanding |
|---|---|
| 2007 (pre-crisis peak) | ~$60 trillion |
| June 2019 | Low point of post-crisis decline |
| June 2022 | $9.3 trillion |
| 2023 | ~$10 trillion |
| Primary driver of the decline | Trade compression, not reduced trading activity |
Source: European Systemic Risk Board (ESRB), Federal Reserve Bank of Chicago
The story of the global CDS market’s long-term trajectory is really a story about trade compression rather than declining demand for credit protection. From a staggering $60 trillion peak in notional outstanding in 2007, the market contracted for over a decade, bottoming out around the middle of 2019 before ticking back up to $9.3 trillion by June 2022 and stabilizing near $10 trillion by 2023. Regulators and market analysts are consistent in attributing this decline primarily to compression techniques that cancel out offsetting, redundant contracts between the same counterparties, mechanically shrinking the reported notional figure without meaningfully reducing dealers’ actual net risk positions or trading activity.
This distinction matters enormously for interpreting today’s 2026 statistics correctly: even though global CDS notional sits at roughly one-sixth of its 2007 peak, underlying trading volumes, index product usage, and US bank credit derivatives activity have all been trending upward again through 2025 and 2026, suggesting the market has found a structurally leaner, better-capitalized, and more centrally cleared equilibrium rather than a market in genuine decline. Academic research characterizes even the most actively traded sovereign and systemically important CDS names as comparatively “shallow and illiquid” markets by historical standards, a persistent structural feature that regulators continue to monitor closely given the outsized signaling role CDS spreads play in pricing credit risk across the broader financial system. For a broader look at how financial fraud and market risk trends are evolving alongside derivatives activity, see our Crypto Fraud Statistics in US report.
Credit Default Swap Regulatory Framework Statistics in the US 2026
| Regulatory Body | Primary CDS-Related Function |
|---|---|
| CFTC | Registers swap dealers, enforces mandatory clearing determinations |
| SEC | Oversees security-based swaps and Securities Clearing Agencies |
| FSOC | Designates systemically important financial market utilities (SIFMUs) |
| OCC | Monitors bank derivatives exposure and capital adequacy quarterly |
| DTCC Trade Information Warehouse | Central repository for CDS trade registration since October 2008 |
| Mandatory clearing determination classes | 2 CDS classes, 4 interest rate swap classes |
Source: CFTC, SEC, Federal Register, DTCC
The regulatory architecture governing US credit default swaps in 2026 traces directly back to reforms enacted after the 2008 financial crisis, when the near-collapse of AIG’s unregulated CDS book exposed just how dangerous opaque, uncleared derivatives exposure could become for the broader financial system. Today, the CFTC and SEC share jurisdiction over the market, with the CFTC responsible for swap dealer registration and mandatory clearing determinations covering specific CDS product classes, while the SEC oversees security-based swaps and registers clearing agencies like ICE Clear Credit. This dual-regulator structure, while occasionally criticized for jurisdictional overlap, has proven durable, and both agencies continue to actively approve new CDS product clearing determinations throughout 2026 as the market evolves.
Trade transparency has improved dramatically since the DTCC’s Trade Information Warehouse began registering CDS trades in October 2008, giving regulators — and increasingly the public, through ISDA’s SwapsInfo platform — visibility into aggregate positioning that simply didn’t exist before the crisis. The Financial Stability Oversight Council’s designation of key clearinghouses as systemically important financial market utilities adds another supervisory layer specifically aimed at ensuring these central counterparties maintain sufficient capital and risk-management standards to absorb member defaults without triggering the kind of cascading failure that regulators feared during the 2008 crisis, a framework that continues to be tested and refined as CDS trading volumes climb back toward pre-pandemic levels heading through 2026.
Disclaimer: The data research report we present here is based on information found from various sources. We are not liable for any financial loss, errors, or damages of any kind that may result from the use of the information herein. We acknowledge that though we try to report accurately, we cannot verify the absolute facts of everything that has been represented.
