The December 2025 SESFOD survey reports expectations of tightening credit terms in early 2026, increased funding demand, and slight changes in market-making activities among large banks.
The December 2025 survey on credit terms and conditions in euro-denominated securities financing and OTC derivatives markets (SESFOD) indicates that credit terms are expected to tighten in the first quarter of 2026, especially for hedge funds.
Funding demand increased across all collateral types, with financing rates rising for nearly all collateral except asset-backed securities. Funding amounts and maturities increased for debt-secured funding.
Price credit terms eased slightly between September and December 2025, driven by market liquidity, competition, and counterparty financial strength. Tightening is expected in early 2026, more so for price terms than non-price terms.
For OTC derivatives, credit terms remained largely unchanged, though valuation disputes increased slightly, particularly for commodity derivatives.
Market-making activities showed minor changes in 2025, with slight increases in derivatives and debt securities. For 2026, respondents expect increased activity across all instruments. A majority reported good or moderate ability to act as market-makers in stress conditions, with improvements for derivatives and declines for debt, asset-backed, and convertible securities.
All previous survey data are available on the ECB Data Portal. The full report, detailed data, and guidelines are accessible on the ECB website. SESFOD is conducted quarterly, covering changes over three-month periods ending in February, May, August, and November. The December 2025 survey collected qualitative data from 26 large banks, including 14 euro area and 12 non-euro area banks.
