ECB securities finance survey finds credit terms remain unchanged Sept-Nov

In line with the two previous survey rounds, respondents to the European Central Bank’s SESFOD (survey on credit terms and conditions in euro-denominated securities financing and over-the-counter derivatives markets) survey reported that, on balance, credit terms offered to counterparties in both securities financing and over-the-counter (OTC) derivatives transactions had remained basically unchanged over the three-month period from September to November 2017. Credit terms were expected to ease slightly for all types of counterparty over the coming three-month period (i.e. the period from December 2017 to February 2018). At the same time, respondents indicated that clients’ efforts to negotiate more favorable credit terms had increased somewhat for all types of counterparty.

As regards the provision of finance collateralized by euro-denominated securities, survey respondents reported that, on balance, the maximum amount of funding, the maximum maturity of funding and haircuts had all remained basically unchanged for many types of collateral. The survey also indicated that client demand had increased for most collateralized funding, in some cases owing to the impending year-end. As in the previous survey round, the liquidity and functioning of markets had remained basically unchanged for most types of underlying collateral.

As regards non-centrally cleared OTC derivatives, a small net percentage of survey respondents reported a tightening of non-price terms and conditions for new or renegotiated OTC derivatives master agreements. That tightening was, however, less pronounced than in the two previous survey rounds.

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