Senior Credit Officer Opinion Survey on Dealer Financing Terms
March 2021
With respect to securities financing transactions, respondents indicated the following:
Nearly one-half of dealers reported increased demand to fund equities, and a smaller net fraction reported such for high-yield corporate bonds (see the exhibit Measures of Demand for Funding and Market Functioning). Demand for funding remained largely unchanged across all other asset classes.
Dealers reported easing of funding terms for various types of securities, especially non-agency residential mortgage-backed securities (RMBS), commercial mortgage-backed securities (CMBS), and consumer asset-backed securities (ABS). Specifically, net fractions of three-fifths, one-half, and four-fifths of dealers reported easing of haircuts and collateral spreads for non-agency RMBS, CMBS, and consumer ABS, respectively. One-fourth, one-third, and one-fifth of respondents, on net, reported an easing of haircuts in high-grade corporate bonds, high-yield corporate bonds, and agency RMBS, respectively. Dealers reported that funding terms for equities remained unchanged.
Approximately one-third of respondents, on net, indicated an improvement in liquidity and market functioning for the non-agency RMBS and consumer ABS markets.3 Smaller net fractions of respondents indicated improvements for other markets.
The full survey is available at https://www.federalreserve.gov/data/scoos/scoos-202103.htm