ACTIVITY on the international derivatives market rebounded to $426 trillion (£256 trillion) in the second quarter, signalling the return of risk appetite, but remained below pre-crisis levels.

According to a Bank for International Settlements (BIS) report published today, total turnover of derivatives rose by 16 per cent, mainly driven by futures and options on short-term interest rates.Turnover on short-term interest rates rose to $344 trillion, from $294 trillion.

Higher stock prices also pushed up turnover of equity index derivatives, although the number of contracts traded went up only slightly.