The European Central Bank (ECB) published the results of the March 2025 Survey on credit terms and conditions in euro-denominated securities financing and OTC derivatives markets (SESFOD).
- Price and non-price credit terms and conditions remained largely unchanged between December 2024 and February 2025
- Financing rates/spreads and haircuts in securities financing transactions decreased across most asset classes
- Demand for funding secured against domestic government bonds decreased for the first time since 2021
Price and non-price credit terms and conditions remained largely unchanged between December 2024 and February 2025, which broadly corresponds to expectations expressed in the previous quarter. For price terms, survey responses indicated no net change, while for non-price terms a very minor net tightening was reported. For the second quarter of 2025, some survey respondents expected a slight tightening in credit terms and conditions. However, the vast majority (88%) stated that, overall, no changes were foreseen.
Turning to financing conditions for funding secured against the various types of collateral, respondents pointed to a decrease in haircuts across nearly all asset classes. Only for high-quality government, sub-national and supra-national bonds were no net changes reported. In particular, credit secured against high-quality corporate bonds, both financial and non-financial, experienced considerable net decreases in haircuts, with a net 20% of respondents marking a decline.
Moreover, financing rates/spreads have now reversed a three-year trend of net increases across all collateral types except equities. For corporate bonds, asset-backed securities and covered bonds, a net decrease of financing rates/spreads has materialized for the first time since 2021. At the same time, demand for funding secured against government bonds experienced a net decrease for the first time in more than three years.