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ECB survey points to steady derivative-market funding costs
By Reuters
Thursday, July 10, 2014 Email this story  |  News Tracker  |  Reprints  |  Printable Version

FRANKFURT (Reuters)—Credit costs for securities financing and derivatives transactions were little changed in the three months to the end of May, a European Central Bank survey released on Thursday [July 10] showed.

The ECB's June survey of credit terms and conditions in euro-denominated securities financing and over-the-counter (OTC) derivatives markets showed that:

  • Price terms remained almost unchanged for most counter-party types except hedge funds.

  • Non-price credit terms eased for banks, dealers and hedge funds, but on balance remained basically unchanged for other counterparty types.

  • Credit terms for funding that is collateralized by euro-denominated securities eased further for many types of collateral, albeit to a lesser extent than during the previous reference period.

    "The survey suggests that, across the entire range of securities financing and over-the-counter derivatives transactions, offered price terms (such as financing rates/spreads) on balance remained almost unchanged over the three-month reference period ending in May 2014," the ECB said in a statement.

    To revive a sluggish euro zone, the ECB cut interest rates to record lows in June and introduced a series of measures to pump money into the economy.

    The ECB survey collected information on changes between March 2014 and May 2014. The results are based on responses from a panel of 28 large banks, comprising 13 euro area banks and 15 banks with head offices outside the euro area.

    By Paul Carrel

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