The Relationship Between Derivatives Use and Bank Profitability of the Five Largest U.S. Banks

The aim of this study is to examine the relationship between the use of derivatives and profitability of the five largest U.S. banks for the period Q3:2010 -Q2:2017 over which new rules governing bank behavior in the OTC derivatives market were in effect. Bank profitability is measured by the return on assets, ROA, and return on equity, ROE as functions of both bank internal and external determinants.