EU banks expect OTC trading conditions to tighten
Credit conditions had eased in Q3 and Q4 2020, but were expected to get tougher in Q1
Top dealers told the European Central Bank (ECB) they thought credit terms and conditions for trading over-the-counter derivatives and securities financing transactions (SFTs) would tighten somewhat over Q1, after they loosened in the second half of 2020.
The survey of 26 banks showed that 13% said price and non-price terms would likely tighten somewhat, and 4% that they’d likely ease. The same survey covering Q4 2020 showed just 4% thought terms would tighten and 9% that they’d ease.
Trading
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