ECB reveals SESFOD survey results
02 August 2019 Frankfurt
Image: Shutterstock
In both the securities financing market and over-the-counter (OTC) derivatives market, credit terms offered to almost all counterparties eased between March and May 2019, the European Central Bank (ECB) revealed.
In the ECB’s results of the June 2019 survey on credit terms and conditions in euro-denominated securities financing and OTC derivatives markets (SESFOD) markets.
The main drivers for this included the improvement in liquidity conditions and market functioning.
Additionally, stronger competitive pressures from other institutions and increased balance sheet availability were also the main drivers of this development.
Looking ahead, the ECB noted that a small net percentage of respondents expect price terms to continue easing for most counterparty types over the following three months.
In line with previous SESFOD survey results, responding institutions concentrated on credit exposures to large banks and CCPs increased further in the review period.
Meanwhile, for the provision of finance collateralised by euro-denominated securities, the maximum amount and the maturity of funding continued to decline.
The ECB explained that this was especially for funding secured with government and covered bonds.
At the same time, financing rates/spreads decreased for funding secured with many types of collateral.
In addition, the demand for funding continued on a declining trend across all types of collateral.
The ECB added that for non-centrally cleared OTC derivatives, conditions remain broadly unchanged.
In the ECB’s results of the June 2019 survey on credit terms and conditions in euro-denominated securities financing and OTC derivatives markets (SESFOD) markets.
The main drivers for this included the improvement in liquidity conditions and market functioning.
Additionally, stronger competitive pressures from other institutions and increased balance sheet availability were also the main drivers of this development.
Looking ahead, the ECB noted that a small net percentage of respondents expect price terms to continue easing for most counterparty types over the following three months.
In line with previous SESFOD survey results, responding institutions concentrated on credit exposures to large banks and CCPs increased further in the review period.
Meanwhile, for the provision of finance collateralised by euro-denominated securities, the maximum amount and the maturity of funding continued to decline.
The ECB explained that this was especially for funding secured with government and covered bonds.
At the same time, financing rates/spreads decreased for funding secured with many types of collateral.
In addition, the demand for funding continued on a declining trend across all types of collateral.
The ECB added that for non-centrally cleared OTC derivatives, conditions remain broadly unchanged.
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