Capturing the Evolution of Dealer Credit Terms Related to Securities Financing and OTC Derivatives
DIANE Publishing, 2011 - 13 pages
This is a print on demand edition of a hard to find publication. In the period prior to the financial crisis, leverage in the financial system increased substantially. This buildup was likely facilitated by, among other factors, a loosening of credit terms related to OTC derivatives and securities financing transactions. However, little or no systematic data on these trends were available at the time. The new Senior Credit Officer Opinion Survey on Dealer Financing Terms, which was conducted for the first time in June 2010, partially fills this gap. The new survey provides qualitative information about changes in credit terms and conditions across the entire range of these transactions, and the evolution of market conditions and conventions applicable to such activities.
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agency RMBS average and most-favored clients collateralized collateral disputes core questions counterparty types Credit Officer Opinion credit terms applicable Dealer Financing Terms demand for funding derivatives and securities disputes with clients draft survey equities exposures to dealers Federal Reserve Board Federal Reserve System financial crisis financial intermediaries financing and OTC fractions of dealers Global Financial System group of questions high-grade corporate bonds institutional investors institutions that reported intensity of efforts liquidity and functioning loosening mark and collateral market liquidity market participants maximum maturity more-aggressive competition most-favored clients nonprice terms Officer Opinion Survey OTC derivative transactions OTC derivatives trades past three months percentage of institutions plain vanilla pools of capital price and nonprice Procyclicality qualitative survey questions focused Questions include changes remain basically unchanged respondents indicated securities financing transactions Senior Credit Officer SLOOS small net fraction Survey on Dealer survey respondents terms had increased total return swaps volume of mark