Securities financing markets see higher demand for funding, says ECB
21 May 2026 Europe
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The European Central Bank (ECB) has released the results of its March survey on credit terms and conditions in euro-denominated securities financing and OTC derivatives markets (SESFOD).
Looking at securities financing, demand for funding showed an increase across all collateral types in net terms, whereas financing conditions showed mixed developments.
The maximum amount of funding made available to counterparties increased, although changes varied across collateral types. The maximum maturity of funding offered also increased slightly on balance.
The survey reports that haircuts decreased marginally across a few types of collateral but were unchanged in most instances.
Reflecting higher demand, financing rates/spreads increased for funding secured against all collateral types except non-domestic high-quality government bonds.
Liquidity conditions and market functioning were unchanged for most collateral types, but the survey recorded signs of improvement for domestic government bonds and high-quality government bonds.
There were almost no changes in the use of covenants and triggers or central counterparties, or in the volume, duration, and persistence of collateral valuation disputes.
Turning to non-centrally cleared OTC derivatives, the ECB says survey responses indicate a minor decline in initial margin requirements over the reporting period.
The maximum amount of exposure and maximum maturity of trades were largely stable, as were the liquidity and trading of derivatives.
Some respondents reported a decrease in the volume of valuation disputes, while the duration and persistence of valuation disputes decreased slightly for most types of derivative, the Bank says.
Terms for new or renegotiated master agreements and the posting of non-standard collateral eased slightly over the review period.
The March 2026 survey collected qualitative information on changes between December 2025 and February 2026.
The results are based on the responses received from a panel of 26 large banks, comprising 14 euro area banks and 12 banks with head offices outside the euro area.
The SESFOD is conducted four times a year and covers changes in credit terms and conditions over three-month reference periods ending in February, May, August, and November.
Looking at securities financing, demand for funding showed an increase across all collateral types in net terms, whereas financing conditions showed mixed developments.
The maximum amount of funding made available to counterparties increased, although changes varied across collateral types. The maximum maturity of funding offered also increased slightly on balance.
The survey reports that haircuts decreased marginally across a few types of collateral but were unchanged in most instances.
Reflecting higher demand, financing rates/spreads increased for funding secured against all collateral types except non-domestic high-quality government bonds.
Liquidity conditions and market functioning were unchanged for most collateral types, but the survey recorded signs of improvement for domestic government bonds and high-quality government bonds.
There were almost no changes in the use of covenants and triggers or central counterparties, or in the volume, duration, and persistence of collateral valuation disputes.
Turning to non-centrally cleared OTC derivatives, the ECB says survey responses indicate a minor decline in initial margin requirements over the reporting period.
The maximum amount of exposure and maximum maturity of trades were largely stable, as were the liquidity and trading of derivatives.
Some respondents reported a decrease in the volume of valuation disputes, while the duration and persistence of valuation disputes decreased slightly for most types of derivative, the Bank says.
Terms for new or renegotiated master agreements and the posting of non-standard collateral eased slightly over the review period.
The March 2026 survey collected qualitative information on changes between December 2025 and February 2026.
The results are based on the responses received from a panel of 26 large banks, comprising 14 euro area banks and 12 banks with head offices outside the euro area.
The SESFOD is conducted four times a year and covers changes in credit terms and conditions over three-month reference periods ending in February, May, August, and November.
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