The European Central Bank published the results of its September 2025 Survey on credit terms and conditions in euro-denominated securities financing and over-the-counter derivatives (SESFOD), showing that overall credit terms and conditions were largely unchanged between June 2025 and August 2025. Where tightening occurred, respondents mainly attributed it to balance sheet availability, and demand for lending against collateral increased across most asset classes. Non-price credit terms tightened slightly for banks and dealers and for non-financial corporations, while price terms eased slightly for hedge funds, insurance companies, investment funds and sovereigns. In secured funding, demand increased for all collateral types except asset-backed securities and high-quality non-financial corporate bonds, and financing rates or spreads rose for funding secured against government bonds and equities. In non-centrally cleared OTC derivatives, initial margin requirements were described as broadly unchanged, but valuation disputes lasted longer for credit and commodity derivatives and liquidity and trading conditions deteriorated somewhat for equity derivatives; resources devoted to managing concentrated credit exposures increased somewhat across securities financing and derivatives. Looking ahead, no respondents expected a change in overall credit terms for any counterparty type in the fourth quarter of 2025.
European Central Bank 2025-10-31
European Central Bank survey finds credit terms broadly unchanged while secured funding demand rises
The European Central Bank's September 2025 Survey showed largely unchanged credit terms from June to August 2025. Non-price terms tightened slightly for banks, dealers, and non-financial corporations, while price terms eased for hedge funds and other financial entities. Demand for secured funding increased, except for asset-backed securities and high-quality non-financial corporate bonds, with no expected changes in overall credit terms for the fourth quarter of 2025.