ECB securities financing survey records fourth straight quarter of easing credit terms

The ECB's quarterly SESFOD survey covers how 26 large banks set credit terms in euro-denominated securities financing and OTC derivatives markets. This round shows a fourth consecutive quarter of slight easing, concentrated in pricing, alongside rising valuation disputes in parts of the derivatives market. It is a useful read on how dealers are pricing counterparty risk heading into a period of geopolitical uncertainty.

• Overall credit terms and conditions eased slightly for all counterparty types for a fourth consecutive quarter, mainly through price terms.
• Non-price terms eased slightly for banks and dealers but tightened slightly for hedge funds, whose use of leverage increased slightly.
• Demand for securities financing rose across most collateral types, led by equities at a net 27% of respondents, while haircuts fell for most bond collateral and asset-backed securities.
• Initial margin requirements decreased slightly for FX, interest rate, equity and several credit derivative types, while valuation disputes increased for several derivative types, particularly credit derivatives.
• Results are based on responses from 26 large banks, comprising 14 euro area banks and 12 with head offices outside the euro area.

Executive summary

The European Central Bank published the results of its September 2026 SESFOD survey on 7 October 2026, covering changes in credit terms and conditions in euro-denominated securities financing and OTC derivatives markets between June and August 2026. The survey period…

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