Prof. Jayanth R. Varma’s Financial Markets Blog

A blog on financial markets and their regulation

Quadrillion mantle passes from Italy to Japan after a decade

In the 1990s, we used to joke that the word quadrillion was invented to measure the Italian pubic debt. The introduction of the euro put an end to this joke. Italy’s public debt is currently “only” around two trillion euros, but it would be around four quadrillion lire at 1999 exchange rates. After a gap of more than a decade, the mantle has passed to Japan whose public debt crossed the quadrillion yen mark recently.

The only other important monetary amount that I am aware of that could be in the quadrillion range is the total outstanding notional value of all financial derivatives in the world. The BIS estimate (which is perhaps conservative) for this is only around $600 trillion, but some other estimates (which are perhaps exaggerated) put it in the range of $1,200 – $1,500 trillion.


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