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ECB survey finds euro securities financing credit terms broadly resilient

While overall credit terms eased slightly, the survey showed financing rates and spreads rose across collateral types, including a net 31% of respondents for asset backed securities.

Reported · Written up by our desk · Central Banks

The ECB said its June 2026 survey of credit terms and conditions in euro-denominated securities financing and OTC derivatives markets found terms broadly resilient during a period of heightened volatility from March to May 2026.

The ECB attributed the volatility partly to an oil supply shock from escalating Middle East conflict, which pushed commodity prices higher and weighed on risk sentiment in March before recovering in April and May.

According to the ECB survey, overall credit terms eased slightly for all counterparty types for a second straight quarter, driven entirely by price terms, while non-price terms were basically unchanged. Looking ahead to June through August 2026, respondents expected terms to remain broadly unchanged, with only a very small net share expecting some tightening in price terms for banks and dealers.

In securities financing, the ECB reported financing rates and spreads rose across all collateral types, with significant increases for asset-backed securities, where a net 31% of respondents cited higher spreads, and for high-yield corporate bonds and domestic government bonds, where a net 29% reported increases. At the same time, funding demand grew across almost all collateral types, particularly against equities, where a net 33% of respondents reported higher demand, as dealers reduced maximum funding amounts and maturities for several bond collateral types but increased funding availability for equity secured financing. The ECB also noted a slight deterioration in liquidity and functioning for equities, high-yield corporate bonds, and high-quality financial corporate bonds, alongside a rise in collateral valuation disputes across collateral types.

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