The use of derivative financial instruments in Irish financial markets has grown sharply, with new Central Bank figures showing average turnover of $12.6 billion (€10.23 billion) this year, more than twice the $6 billion recorded in 2001.

Derivatives are financial instruments whose value is derived from underlying trading in securities, currencies and commodities.

In Dublin, interest rate swaps - under which investors exchange future streams of expected interest payments - were the main contributor to the rise of derivative trading, accounting for 83 per cent of turnover . The Central Bank survey found $6.9 billion in daily trading on the conventional Dublin foreign exchange market, broadly unchanged from three years ago.

The Bank's figures were part of a survey by the Bank for International Settlements. It showed that trading on the world's foreign exchange markets has leapt to a record $1,900 billion a day, driven by renewed interest in currencies as investments.