Credit terms and conditions in euro-denominated securities financing and OTC derivatives markets remained mostly stable between June and August 2025, according to the latest survey results released by the European Central Bank (ECB). Some tightening was observed, attributed mainly to balance sheet availability.
Demand for lending against collateral increased across most asset classes, except for asset-backed securities and high-quality non-financial corporate bonds. There was a slight tightening of non-price terms among banks, dealers, and non-financial corporations. In contrast, price terms eased slightly for hedge funds, insurance companies, investment funds, and sovereigns.
The primary reasons cited for tightening pressures were balance sheet availability and the financial strength of counterparties. However, these pressures were offset by easing influences from general market liquidity and competition from other institutions. No changes in overall credit terms are expected in the fourth quarter of 2025.
For secured funding, demand increased across all collateral types except asset-backed securities and high-quality non-financial corporate bonds. Financing rates rose for government bonds and equities but remained unchanged for other collateral types. Maximum maturities of funding, demand for funding, and haircuts also stayed largely unchanged.
Regarding non-centrally cleared OTC derivatives, initial margin requirements saw few changes. However, valuation disputes lasted longer for credit and commodity derivatives. Liquidity and trading conditions remained stable overall but deteriorated somewhat for equity derivatives.
Resources dedicated to managing concentrated credit exposures increased slightly. The ECB has made data from previous survey rounds available on its Data Portal for easier access and visualization.
The September 2025 SESFOD survey collected qualitative information on changes between June 2025 and August 2025 from a panel of 26 large banks—14 within the euro area and 12 outside it. The SESFOD is conducted quarterly to assess changes over three-month periods ending in February, May, August, and November.
Further details on the September 2025 SESFOD results can be found on the ECB’s website.
Information from this article can be found here.
