NEW YORK -- The International Swap Dealers Association said its latest survey of the swap market showed the notional principal amount of interest rate and currency swap contracts outstanding had reached more than $3.87 trillion by the end of 1991.

The survey also found that of the total, just over $1 trillion was written in the six months from July to December of 1991.

"Growth like this is a signal that swaps continue to be a useful risk-management tool," said Mark Brickell, a director of the association.

Rate Swaps Dominate

The survey showed that the $3.87 trillion included $3.06 trillion of interest rate swaps and $8 billion of currency swaps. Related swap products, including caps, collars, floors, and swap options, totaled $577.2 billion. The swap option alone accounted for $109 billion.

The association's chairman, Malcolm Basing, said notional value - the value of the underlying securities rather than just the interest payments being swapped - remains the best indicator of activity in the market. But he stressed that it did not reflect the credit exposure of the industry.

The rapid growth of the swap market in notional terms has begun to set off some warning bells among bank regulators.

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