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Trading assets and liabilities | 12 Months Ended
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Dec. 31, 2011
Trading assets and liabilities |
| 4. | Trading assets and liabilities
The fair value of trading assets and liabilities is as follows:
|  | December 31, |
(In thousands of US$) |  | 2011 |  |  | 2010 |
Trading assets: |  |  |  |  |  |  |  |
Sovereign bonds |  |  | 20,415 |  |  |  | 45,058 |
Corporate bonds |  |  | - |  |  |  | 5,354 |
Cross-currency interest rate swaps |  |  | 21 |  |  |  | - |
Total |  |  | 20,436 |  |  |  | 50,412 |
Trading liabilities: |  |  |  |  |  |  |  |
Interest rate swaps |  |  | 748 |  |  |  | 3,031 |
Cross-currency interest rate swaps |  |  | 4,836 |  |  |  | 907 |
Total |  |  | 5,584 |  |  |  | 3,938 |
Sovereign and corporate bonds outstanding as of December 31, 2011, 2010 and 2009, have generated losses of $0.7 million during 2011, and gains of $0.1 million and $3.3 million during 2010 and 2009, respectively, which have been recorded in earnings. As of December 31, 2011 and 2010, bonds with a carrying value of $19.0 million and $34.2 million, respectively, secured repurchase agreements accounted for as secured borrowings and derivative financial instruments transactions. During 2011, 2010 and 2009, the Bank recognized the following gains and losses related to trading derivative financial instruments:
|  | Year ended December 31, |
(In thousands of US$) |  | 2011 |  |  | 2010 |  |  | 2009 |
Forward repurchase agreements |  |  | - |  |  |  | - |  |  |  | 2,570 |
Interest rate swaps |  |  | (299 | ) |  |  | (2,091 | ) |  |  | (551 | )
Cross-currency interest rate swaps |  |  | (4,858 | ) |  |  | (1,662 | ) |  |  | (638 | )
Credit default swap |  |  | - |  |  |  | 13 |  |  |  | 110 |
Forward foreign exchange |  |  | 93 |  |  |  | - |  |  |  | - |
Future contracts |  |  | (29 | ) |  |  | - |  |  |  | - |
Total |  |  | (5,093 | ) |  |  | (3,740 | ) |  |  | 1,491 |
These losses are reported in the Net gain (loss) from trading securities and Net gain (loss) from the investment fund trading lines in the consolidated statements of income. In addition to the trading derivative financial instruments, the Bank has hedging derivative financial instruments that are disclosed in Note 20. As of December 31, 2011 and 2010, trading derivative liabilities include interest rate swap and cross-currency interest rate swap contracts that were previously designated as fair value hedges of securities available-for-sale and foreign-currency loans, respectively, that no longer qualify for hedge accounting. As of December 31, 2011 and 2010, information on the nominal amounts of derivative financial instruments held for trading purposes is as follows:
|  | 2011 |  |  | 2010 |
(In thousands of US$) |  | Nominal |  |  | Fair Value |  |  | Nominal |  |  | Fair Value |
|  | Amount |  |  | Asset |  |  | Liability |  |  | Amount |  |  | Asset |  |  | Liability |
Interest rate swaps |  |  | 17,000 |  |  |  | - |  |  |  | 748 |  |  |  | 46,800 |  |  |  | - |  |  |  | 3,031 |
Cross-currency interest rate swaps |  |  | 85,163 |  |  |  | 21 |  |  |  | 4,836 |  |  |  | 8,179 |  |  |  | - |  |  |  | 907 |
Future contracts |  |  | 139 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total |  |  | 102,302 |  |  |  | 21 |  |  |  | 5,584 |  |  |  | 54,979 |  |  |  | - |  |  |  | 3,938 |

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- Definition The entire disclosure for trading assets and liabilities, that includes bonds acquired for trading purposes and receivables (unrealized gains) and payables (unrealized losses) related to derivative financial instruments which are not designated as hedges or which do not qualify for hedge accounting. + References No definition available. + Details
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