ECB Publishes Results of Survey on Credit Terms and Conditions
ECB published results of the March 2019 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter (OTC) derivatives markets. The results of this survey are based on responses from a panel of 28 large banks, comprising 14 euro area banks and 14 banks with head offices outside the euro area. The results reveal that, in both the securities financing market and the OTC derivatives market, credit terms offered to counterparties tightened for almost all counterparties between December 2018 and February 2019.
Looking ahead, however, a small net percentage of respondents expect price terms to ease for most counterparty types over the next three months, with non-price terms expected to remain more stable. Regarding the provision of finance collateralized by euro-denominated securities, survey respondents reported that, on balance, the maximum amount of funding had decreased and some haircuts had increased, especially for funding secured using domestic government bonds and corporate bonds. Liquidity for domestic government bonds used as collateral deteriorated somewhat according to about 30% of respondents. A similar deterioration was reported by a few respondents for all types of corporate bonds and equities. Regarding non-centrally cleared OTC derivatives, respondents indicated that conditions remained broadly unchanged.
The survey for March 2019 also included a number of special questions, which sought to offer a longer-term perspective on credit standards by comparing the current conditions with those observed one year ago. Respondents reported that, compared with a year ago, terms and conditions in the secured financing and OTC derivatives markets were, on balance, slightly tighter for all counterparty types except hedge funds and insurance companies. In net terms, credit standards for secured funding were broadly unchanged relative to a year ago, with the strong tightening observed by some respondents being offset by the easing reported by others.
The Eurosystem conducts a quarterly qualitative survey on credit terms and conditions in euro-denominated securities financing transaction and OTC derivatives markets. The survey covers changes in credit terms and conditions over three-month reference periods ending in February, May, August, and November. The survey questions are grouped into three sections counterparty types, securities financing, and non-centrally cleared OTC derivatives.
Related Links
Keywords: Europe, EU, Banking, Securities, Survey Results, OTC Derivatives, Credit Terms and Conditions, Securities Financing Transactions, ECB
Previous Article
EBA Launches the 2019 Data Transparency Exercise for Banks in EURelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
