9 Derivatives

In CHF million 
  Fair value assetsFair value liabilitiesContract/notional amount
Notes  31.12.200931.12.200831.12.200931.12.200831.12.200931.12.2008
Currency derivatives
Forward contracts
  475986848635 57142 887
  16591 474
Options (exchange-traded)
  61215982 0003 000
Total currency derivatives
  4811 1238924337 57147 361
Interest rate derivatives
Forward rate agreements
  22032105 341390
Options (exchange-traded)
  8251 193
Total interest rate derivatives
  221132365 3412 202
Equity/index derivatives
Forward contracts
Options (exchange-traded)
  2331401212811 2753 582
Total equity/index derivatives
  2411691243611 5594 496
Other derivatives
Credit derivatives
Derivatives embedded in insurance contracts
Total other derivatives
Derivatives for the account and risk of the Swiss Life Group's customers
5  10 6 36 42
Total derivatives
  7901 34928234655 17054 823
of which derivatives designated and accounted for as hedging instruments 
Derivatives designated as fair value hedges  105415162 0681 550

Derivatives held for trading

Derivatives held for trading primarily comprise derivatives that share a risk with other financial instruments and give rise to opposite changes in fair value that tend to offset each other (“economic hedges”).

To manage the risks associated with derivative trading, the Group establishes risk levels and monitors these exposures. Exposure to price risk on both derivatives and their underlyings is managed in accordance with risk limits set by management for buying or selling instruments or closing out positions. The risks arise from open positions in interest rates, currencies and equity instruments, all of which are exposed to general and specific market movements. The risks that the Group primarily faces due to the nature of its investments and liabilities are interest rate risk and equity price risk.

Derivatives designated and accounted for as hedging instruments

Derivatives designated and accounted for as hedging instruments primarily comprise derivatives associated with fair value hedges and cash flow hedges that qualify for hedge accounting.

Derivatives designated as fair value hedges
In CHF million 
  Fair value assets Fair value liabilitiesGains/losses on hedging instruments Gains/losses on hedged items Contract/notional amount
Interest rate swaps
Currency forward contracts
  1054131549209–49–2091 3341 103
Total derivatives designated as fair value hedges
  10 54 15 16 4 179 –5 –179 2 068 1 550

In 2009 and 2008 the Group entered into interest rate swaps to hedge the available-for-sale fixed-rate bond portfolios in CHF, USD and EUR against changes in the fair value attributable to interest rate risk. The fair value of the bond portfolios as at 31 December 2009 was CHF 0.8 billion in total (2008: fair value of the bond portfolios CHF 0.4 billion).

Forward contracts are used as hedging instruments to protect investments in hedge funds against adverse movements in EUR and USD exchange rates.