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Senior Credit Officer Opinion Survey on Dealer Financing Terms
September 2015

Summary

In this Section:

The September 2015 Senior Credit Officer Opinion Survey on Dealer Financing Terms collected qualitative information on changes over the previous three months in credit terms and conditions in securities financing and over-the-counter (OTC) derivatives markets. In addition to the core set of questions, the survey included a set of special questions on the effects of derivatives central-clearing mandates on clients' use of central counterparty clearing services since the beginning of 2014. The 20 institutions participating in the survey account for almost all dealer financing of dollar-denominated securities to nondealers and are the most active intermediaries in OTC derivatives markets. The survey was conducted during the period between August 18, 2015, and August 31, 2015. The core questions asked about changes between June 2015 and August 2015.1

Responses to the core questions in the September survey offered a few insights regarding recent developments in dealer-intermediated markets:

  • Similar to the June survey, nearly one-third of respondents reported an increase in resources and attention devoted to the management of concentrated credit exposure to central counterparties and other financial utilities over the past three months.
  • Dealers indicated that, on net, the use of financial leverage by all classes of counterparties included in the survey had remained basically unchanged over the past three months.
  • Continuing a trend seen in recent surveys, a net fraction of one-third of dealers noted an increase in funding demand for non-agency residential mortgage-backed securities (RMBS).
  • Over one-third of respondents indicated that effective financing rates (collateral spreads over the relevant benchmark) in securities financing transactions have increased for high-yield corporate bonds, non-agency RMBS, and commercial mortgage-backed securities (CMBS) over the past three months. In addition, on net, approximately one-third of respondents indicated that the liquidity and functioning of the markets for high-yield corporate bonds, CMBS, and consumer asset-backed securities (ABS) have deteriorated.2
  • In responses to the set of special questions regarding clients' use of central counterparty clearing services for OTC derivatives, nearly one-half of dealers reported an increase in the use of credit and interest rate derivative contracts that are subject to mandatory clearing since the beginning of 2014. Over three-fourths of respondents who reported an increase cited clients' need to comply with mandatory clearing requirements as among the most important reasons for the increase. Over four-fifths of respondents noted that the use of clearing services for derivatives eligible but not mandated for clearing remained largely unchanged over the same period. The most important reasons for the increase in clearing services for credit derivatives eligible for clearing (but not mandated) were expansion in the scope of clearing-eligible products and margin efficiency or other cost savings for cleared transactions. Regarding how different client types have altered their use of clearing services, on net, about two-fifths of respondents indicated that dealers, other financial intermediaries, hedge funds, and separately managed accounts increased their use of clearing services. Approximately one-fourth of the respondents indicated that mutual funds, exchange-traded funds (ETFs), pension plans, and endowments increased their use of clearing services.

Counterparty Types

(Questions 1-40)

Dealers and Other Financial Intermediaries. As in the past several surveys, over four-fifths of respondents to the September survey reported that the amount of resources and attention devoted to the management of concentrated credit exposure to dealers and other financial intermediaries remained basically unchanged over the past three months, while the remainder pointed to an increase (see the exhibit "Management of Concentrated Credit Exposures and Indicators of Supply of Credit.")

Central Counterparties and Other Financial Utilities. In the September survey, nearly one-third of respondents indicated that they had increased the amount of resources and attention devoted to the management of concentrated credit exposures to central counterparties and other financial utilities over the past three months. One-fourth of dealers noted that changes in the practices of central counterparties, including changes in margin requirements and haircuts, had influenced, to some extent, the credit terms applied to clients on bilateral transactions that are not cleared.

Hedge Funds. Most respondents to the September survey indicated that both price terms (such as financing rates) and nonprice terms (including haircuts, maximum maturity, covenants, cure periods, cross-default provisions, and other documentation features) offered to hedge funds for securities financing and OTC derivatives transactions were little changed over the past three months. Over four-fifths of dealers reported no change in differential terms to their most-favored hedge funds, with the remaining indicating that differential terms had increased somewhat. The intensity of efforts by hedge fund clients to negotiate more-favorable terms remained essentially unchanged. On net, the use of leverage and the availability of additional (and not utilized) financial leverage under agreements currently in place with hedge funds also remained unchanged over the past three months (see the exhibit "Use of Financial Leverage.")

Trading Real Estate Investment Trusts. One-fourth of respondents to the September survey indicated that while price terms offered to trading real estate investment trusts had tightened somewhat over the past three months, nonprice terms had remained about unchanged on net. The provision of differential terms to most-favored clients and the intensity of efforts by clients to negotiate more-favorable terms were also reported to be little changed, as was the use of financial leverage.

Mutual Funds, Exchange-Traded Funds, Pension Plans, and Endowments. As in previous surveys, almost all respondents to the September survey indicated that both price and nonprice terms offered to mutual funds, ETFs, pension plans, and endowments had remained basically unchanged over the past three months. Provision of differential terms to most-favored clients and the intensity of efforts by clients to negotiate more-favorable terms were reported to be little changed overall. Almost all respondents indicated that the use of financial leverage had remained unchanged over the past three months.

Insurance Companies. Respondents to the September survey indicated that both price and nonprice terms offered to insurance companies had changed little over the past three months, as had the use of financial leverage. Provision of differential terms to most-favored clients were also reported to be little changed. On aggregate, the intensity of efforts by clients to negotiate more-favorable terms was little changed.

Separately Managed Accounts Established with Investment Advisers. All of the dealers indicated in the September survey that price and nonprice terms negotiated by investment advisers on behalf of separately managed accounts were basically unchanged over the past three months. Provision of differential terms to most-favored clients and the use of financial leverage by investment advisers were also reported to be unchanged, as was the intensity of efforts by investment advisers to negotiate more-favorable terms.

Nonfinancial Corporations. Respondents indicated that both price and nonprice terms offered to nonfinancial corporations had remained largely unchanged over the past three months. The intensity of efforts by nonfinancial corporations to negotiate more-favorable price and nonprice terms remained unchanged.

Mark and Collateral Disputes. As in previous surveys, respondents in September indicated that the volume, persistence, and duration of mark and collateral disputes with all counterparty types included in the survey were little changed over the past three months.

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Over-the-Counter Derivatives

(Questions 41-51)

In the September survey, all firms reported that nonprice terms (such as acceptable collateral, covenants, and the recognition of portfolio or diversification benefits) incorporated in new or renegotiated OTC derivatives master agreements were basically unchanged over the past three months.3 For all contract types surveyed, initial margins for average and most-favored clients were also reportedly little changed.4

Dealers reported little change in the use of nonstandard collateral--that is, collateral other than cash and U.S. Treasury securities--to fulfill margin requirements. On net, respondents generally reported that the volume, persistence, and duration of mark and collateral disputes had remained unchanged for all contract types.

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Securities Financing

(Questions 52-79)5

Effective financing rates (collateral spreads over the relevant benchmark) in securities financing transactions were reported to have been increased for riskier collateral types covered by the survey over the past three months. Specifically, approximately two-fifths of respondents reported an increase in financing rates for high-yield corporate bonds and non-agency RMBS, while almost one-third of respondents reported an increase in financing rates for CMBS. Smaller fractions of respondents reported increases in the financing rates for high-grade corporate bonds, equities, agency RMBS, and consumer ABS. Haircuts on securities financing transactions, however, were reported to be little changed on net.

As in previous surveys, two-fifths of dealers pointed to an increase in demand for funding of non-agency RMBS over the past three months (see the exhibit "Measures of Demand for Funding and Market Functioning.") Almost one-half of respondents reported an increase in demand for term funding--that is, funding with a maturity greater than 30 days--of non-agency RMBS. For other collateral types covered by the survey, respondents indicated that demand for funding and term funding has remained basically unchanged on net.

Significant net fractions of respondents indicated that the liquidity and functioning of the markets for most of the underlying collateral types covered by the survey has deteriorated over the past three months. Notably, about one-fifth of respondents reported that liquidity and underlying functioning has deteriorated in the high-grade corporate bond market, and more than one-third reported deterioration in the high-yield bond market. In addition, a net fraction of almost one-third of respondents reported a deterioration in the liquidity and functioning of CMBS and consumer ABS markets.

Despite reported increases in financing rates and a deterioration in market liquidity and functioning in a number of markets, similar to previous surveys, all respondents indicated that the volume, duration, and persistence of mark and collateral disputes were basically unchanged for all of the collateral types.

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Special Questions on Clients' Use of Central Clearing Counterparty Services for Over-the-Counter Derivatives Contracts

(Questions 81-90)

In 2009, the G-20 leaders agreed that all standardized OTC derivatives contracts should be cleared through central counterparties. In the United States, mandatory clearing requirements for certain standardized interest rate swaps (IRS) and credit default swap (CDS) index products were phased in over the course of 2013 by the Commodities Futures Trading Commission under new authority provided by the Dodd-Frank Act. In addition to those products whose clearing is mandatory, many CDS and IRS products are eligible for clearing but are not required to be cleared. The September survey's set of special questions asked participants how and why their clients' use of OTC credit and interest rate derivatives subject to mandatory clearing has changed since January 1, 2014. It also asked how and why the use of clearing services has changed for OTC credit and interest rate derivatives that are eligible for clearing but for which clearing is not mandated.

Regarding the use of credit and interest rate derivatives subject to mandatory clearing, one-third of the dealers reported little change in clients' use of U.S. dollar (USD)-denominated OTC credit derivatives, and one-half of the dealers reported little change in clients' use of USD-denominated OTC interest rate derivatives. Almost one-half of respondents indicated an increase in clients' use of credit derivatives, and two-fifths indicated an increase in clients' use of interest rate derivatives.

Respondents reporting a change in client use of derivatives subject to mandatory clearing requirements were asked to identify up to two of the most important reasons for the change. Three-fourths of the dealers reporting an increase in the use of credit derivatives subject to mandatory clearing pointed to the need to comply with mandatory clearing requirements as among the reasons for the increase, while about one-third identified counterparty risk mitigation associated with central clearing as among the reasons for the increase.6 Similarly, among the dealers noting an increase in the use of interest rate derivatives subject to mandatory clearing, all pointed to the need to comply with mandatory clearing requirements. Among dealers reporting a decrease in client use of OTC derivatives subject to mandatory clearing requirements, higher margins or other costs associated with cleared transactions was the most frequently cited reason.

Regarding OTC derivatives not subject to mandatory clearing but eligible to be cleared, approximately two-thirds of respondents reported no change in the use of central clearing services. However, one-fifth of dealers reported an increase in the use of clearing services for credit derivatives and almost one-third reported an increase for interest rate derivatives. The most important reasons for the increase in clearing services for credit derivatives eligible (but not mandated) for clearing were expansion in the scope of clearing-eligible products and margin efficiency or other cost savings for cleared transactions. With respect to interest rate derivatives, the most important reasons for the increase were expansion in the scope of clearing-eligible products, counterparty risk mitigation associated with clearing, and margin efficiency or other costs savings for cleared transactions.7 Of note, one-tenth of respondents reported a decrease in the use of clearing services for both credit and interest rate derivatives eligible for clearing but not mandated for clearing. The two main reasons cited for the decrease were higher margin requirements or other costs for cleared transactions, and differential regulatory treatment for cleared and noncleared transactions (such as differences in capital requirements or exchange/platform trading requirements).

The September survey also asked how the use of central clearing services for OTC derivatives (whether subject to mandatory clearing or not) has changed for different client types. On net, two-fifths of respondents indicated that dealers and other financial intermediaries have increased their use of clearing services for both credit and interest rate OTC derivatives. Responses were similar for hedge funds and separately managed accounts, where two-fifths of dealers reported an increase in client use of clearing services for credit OTC derivatives and one-third reported an increase in client use of clearing services for interest rate OTC derivatives. One-fourth of respondents reported that mutual funds, ETFs, pension plans, and endowments also increased their use of clearing services for both credit and interest rate OTC derivatives.

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This document was prepared by Sebastian Infante, Division of Monetary Affairs, Board of Governors of the Federal Reserve System. Assistance in developing and administering the survey was provided by staff members in the Statistics Function and the Markets Group at the Federal Reserve Bank of New York.

 

Exhibit 1: Management of Concentrated Credit Exposures and Indicators of Supply of Credit

Exhibit 1: Management of Concentrated Credit Exposures and Indicators of Supply of Credit. See accessible link for data.

Accessible version

 

Exhibit 2: Use of Financial Leverage

Exhibit 2: Use of Financial Leverage. See accessible link for data.

Accessible version

 

Exhibit 3: Measures of Demand for Funding and Market Functioning

Exhibit 3: Measures of Demand of Funding and Market Functioning. See accessible link for data.

Accessible version

 

Results of the September 2015 Senior Credit Officer Opinion Survey on Dealer Financing Terms

The following results include the original instructions provided to the survey respondents. Please note that percentages are based on the number of financial institutions that gave responses other than "Not applicable." Components may not add to totals due to rounding.

 


Counterparty Types

In this Section:

Questions 1 through 40 ask about credit terms applicable to, and mark and collateral disputes with, different counterparty types, considering the entire range of securities financing and over-the-counter (OTC) derivatives transactions. Question 1 focuses on dealers and other financial intermediaries as counterparties; questions 2 and 3 on central counterparties and other financial utilities; questions 4 through 10 focus on hedge funds; questions 11 through 16 on trading real estate investment trusts (REITs); questions 17 through 22 on mutual funds, exchange-traded funds (ETFs), pension plans, and endowments; questions 23 through 28 on insurance companies; questions 29 through 34 on separately managed accounts established with investment advisers; and questions 35 through 38 on nonfinancial corporations. Questions 39 and 40 ask about mark and collateral disputes for each of the aforementioned counterparty types.

In some questions, the survey differentiates between the compensation demanded for bearing credit risk (price terms) and the contractual provisions used to mitigate exposures (nonprice terms). If your institution’s terms have tightened or eased over the past three months, please so report them regardless of how they stand relative to longer-term norms. Please focus your response on dollar-denominated instruments; if material differences exist with respect to instruments denominated in other currencies, please explain in the appropriate comment space. Where material differences exist across different business areas--for example, between traditional prime brokerage and OTC derivatives--please answer with regard to the business area generating the most exposure and explain in the appropriate comment space.


Dealers and Other Financial Intermediaries

1. Over the past three months, how has the amount of resources and attention your firm devotes to management of concentrated credit exposure to dealers and other financial intermediaries (such as large banking institutions) changed?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 2 10.0
Remained basically unchanged 18 90.0
Decreased somewhat 0 0.0
Decreased considerably 0 0.0
Total 20 100


Central Counterparties and Other Financial Utilities

2. Over the past three months, how has the amount of resources and attention your firm devotes to management of concentrated credit exposure to central counterparties and other financial utilities changed?

Number of Respondents Percent
Increased considerably 1 5.0
Increased somewhat 5 25.0
Remained basically unchanged 14 70.0
Decreased somewhat 0 0.0
Decreased considerably 0 0.0
Total 20 100

3. To what extent have changes in the practices of central counterparties, including margin requirements and haircuts, influenced the credit terms your institution applies to clients on bilateral transactions which are not cleared?

Number of Respondents Percent
To a considerable extent 0 0.0
To some extent 5 25.0
To a minimal extent 8 40.0
Not at all 7 35.0
Total 20 100


Hedge Funds

4. Over the past three months, how have the price terms (for example, financing rates) offered to hedge funds as reflected across the entire spectrum of securities financing and OTC derivatives transaction types changed, regardless of nonprice terms?

Number of Respondents Percent
Tightened considerably 0 0.0
Tightened somewhat 3 15.0
Remained basically unchanged 17 85.0
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 20 100

5. Over the past three months, how has your use of nonprice terms (for example, haircuts, maximum maturity, covenants, cure periods, cross-default provisions or other documentation features) with respect to hedge funds across the entire spectrum of securities financing and OTC derivatives transaction types changed, regardless of price terms?

Number of Respondents Percent
Tightened considerably 0 0.0
Tightened somewhat 1 5.0
Remained basically unchanged 18 90.0
Eased somewhat 0 0.0
Eased considerably 1 5.0
Total 20 100

6. To the extent that the price or nonprice terms applied to hedge funds have tightened or eased over the past three months (as reflected in your responses to questions 4 and 5), what are the most important reasons for the change?

  1. Possible reasons for tightening
    1. Deterioration in current or expected financial strength of counterparties
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    2. Reduced willingness of your institution to take on risk
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    3. Adoption of more-stringent market conventions (that is, collateral terms and agreements, ISDA protocols)
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 1 100.0
      Not important 0 0.0
      Total 1 100

    4. Higher internal treasury charges for funding
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    5. Diminished availability of balance sheet or capital at your institution
      Number of Respondents Percent
      Very important 2 100.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 2 100

    6. Worsening in general market liquidity and functioning
      Number of Respondents Percent
      Very important 1 50.0
      Somewhat important 0 0.0
      Not important 1 50.0
      Total 2 100

    7. Less-aggressive competition from other institutions
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

  2. Possible reasons for easing
    1. Improvement in current or expected financial strength of counterparties
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    2. Increased willingness of your institution to take on risk
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    3. Adoption of less-stringent market conventions (that is, collateral terms and agreements, ISDA protocols)
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    4. Lower internal treasury charges for funding
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    5. Increased availability of balance sheet or capital at your institution
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    6. Improvement in general market liquidity and functioning
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    7. More-aggressive competition from other institutions
      Number of Respondents Percent
      Very important 1 100.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 1 100

7. How has the intensity of efforts by hedge funds to negotiate more-favorable price and nonprice terms changed over the past three months?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 1 5.0
Remained basically unchanged 19 95.0
Decreased somewhat 0 0.0
Decreased considerably 0 0.0
Total 20 100

8. Considering the entire range of transactions facilitated by your institution for such clients, how has the use of financial leverage by hedge funds changed over the past three months?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 2 10.0
Remained basically unchanged 15 75.0
Decreased somewhat 3 15.0
Decreased considerably 0 0.0
Total 20 100

9. Considering the entire range of transactions facilitated by your institution for such clients, how has the availability of additional (and currently unutilized) financial leverage under agreements currently in place with hedge funds (for example, under prime broker, warehouse agreements, and other committed but undrawn or partly drawn facilities) changed over the past three months?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 1 5.0
Remained basically unchanged 18 90.0
Decreased somewhat 1 5.0
Decreased considerably 0 0.0
Total 20 100

10. How has the provision of differential terms by your institution to most-favored (as a function of breadth, duration, and extent of relationship) hedge funds changed over the past three months?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 3 15.0
Remained basically unchanged 17 85.0
Decreased somewhat 0 0.0
Decreased considerably 0 0.0
Total 20 100


Trading Real Estate Investment Trusts

11. Over the past three months, how have the price terms (for example, financing rates) offered to trading REITs as reflected across the entire spectrum of securities financing and OTC derivatives transaction types changed, regardless of nonprice terms?

Number of Respondents Percent
Tightened considerably 0 0.0
Tightened somewhat 4 26.7
Remained basically unchanged 11 73.3
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 15 100

12. Over the past three months, how has your use of nonprice terms (for example, haircuts, maximum maturity, covenants, cure periods, cross-default provisions or other documentation features) with respect to trading REITs across the entire spectrum of securities financing and OTC derivatives transaction types changed, regardless of price terms?

Number of Respondents Percent
Tightened considerably 0 0.0
Tightened somewhat 2 12.5
Remained basically unchanged 13 81.2
Eased somewhat 1 6.2
Eased considerably 0 0.0
Total 16 100

13. To the extent that the price or nonprice terms applied to trading REITs have tightened or eased over the past three months (as reflected in your responses to questions 11 and 12), what are the most important reasons for the change?

  1. Possible reasons for tightening
    1. Deterioration in current or expected financial strength of counterparties
      Number of Respondents Percent
      Very important 1 50.0
      Somewhat important 0 0.0
      Not important 1 50.0
      Total 2 100

    2. Reduced willingness of your institution to take on risk
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 2 100.0
      Not important 0 0.0
      Total 2 100

    3. Adoption of more-stringent market conventions (that is, collateral terms and agreements, ISDA protocols)
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    4. Higher internal treasury charges for funding
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    5. Diminished availability of balance sheet or capital at your institution
      Number of Respondents Percent
      Very important 1 33.3
      Somewhat important 1 33.3
      Not important 1 33.3
      Total 3 100

    6. Worsening in general market liquidity and functioning
      Number of Respondents Percent
      Very important 1 100.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 1 100

    7. Less-aggressive competition from other institutions
      Number of Respondents Percent
      Very important 1 100.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 1 100

  2. Possible reasons for easing
    1. Improvement in current or expected financial strength of counterparties
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    2. Increased willingness of your institution to take on risk
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    3. Adoption of less-stringent market conventions (that is, collateral terms and agreements, ISDA protocols)
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    4. Lower internal treasury charges for funding
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    5. Increased availability of balance sheet or capital at your institution
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    6. Improvement in general market liquidity and functioning
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    7. More-aggressive competition from other institutions
      Number of Respondents Percent
      Very important 1 100.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 1 100

14. How has the intensity of efforts by trading REITs to negotiate more-favorable price and nonprice terms changed over the past three months?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 2 12.5
Remained basically unchanged 14 87.5
Decreased somewhat 0 0.0
Decreased considerably 0 0.0
Total 16 100

15. Considering the entire range of transactions facilitated by your institution for such clients, how has the use of financial leverage by trading REITs changed over the past three months?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 1 6.2
Remained basically unchanged 14 87.5
Decreased somewhat 1 6.2
Decreased considerably 0 0.0
Total 16 100

16. How has the provision of differential terms by your institution to most-favored (as a function of breadth, duration, and extent of relationship) trading REITs changed over the past three months?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 2 12.5
Remained basically unchanged 14 87.5
Decreased somewhat 0 0.0
Decreased considerably 0 0.0
Total 16 100


Mutual Funds, Exchange-Traded Funds, Pension Plans, and Endowments

17. Over the past three months, how have the price terms (for example, financing rates) offered to mutual funds, ETFs, pension plans, and endowments as reflected across the entire spectrum of securities financing and OTC derivatives transaction types changed, regardless of nonprice terms?

Number of Respondents Percent
Tightened considerably 0 0.0
Tightened somewhat 2 10.0
Remained basically unchanged 18 90.0
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 20 100

18. Over the past three months, how has your use of nonprice terms (for example, haircuts, maximum maturity, covenants, cure periods, cross-default provisions or other documentation features) with respect to mutual funds, ETFs, pension plans, and endowments across the entire spectrum of securities financing and OTC derivatives transaction types changed, regardless of price terms?

Number of Respondents Percent
Tightened considerably 1 5.0
Tightened somewhat 0 0.0
Remained basically unchanged 19 95.0
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 20 100

19. To the extent that the price or nonprice terms applied to mutual funds, ETFs, pension plans, and endowments have tightened or eased over the past three months (as reflected in your responses to questions 17 and 18) what are the most important reasons for the change?

  1. Possible reasons for tightening
    1. Deterioration in current or expected financial strength of counterparties
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    2. Reduced willingness of your institution to take on risk
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    3. Adoption of more-stringent market conventions (that is, collateral terms and agreements, ISDA protocols)
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    4. Higher internal treasury charges for funding
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 1 100.0
      Not important 0 0.0
      Total 1 100

    5. Diminished availability of balance sheet or capital at your institution
      Number of Respondents Percent
      Very important 1 50.0
      Somewhat important 0 0.0
      Not important 1 50.0
      Total 2 100

    6. Worsening in general market liquidity and functioning
      Number of Respondents Percent
      Very important 1 100.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 1 100

    7. Less-aggressive competition from other institutions
      Number of Respondents Percent
      Very important 1 100.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 1 100

  2. Possible reasons for easing
    1. Improvement in current or expected financial strength of counterparties
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    2. Increased willingness of your institution to take on risk
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    3. Adoption of less-stringent market conventions (that is, collateral terms and agreements, ISDA protocols)
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    4. Lower internal treasury charges for funding
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    5. Increased availability of balance sheet or capital at your institution
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    6. Improvement in general market liquidity and functioning
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    7. More-aggressive competition from other institutions
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

20. How has the intensity of efforts by mutual funds, ETFs, pension plans, and endowments to negotiate more-favorable price and nonprice terms changed over the past three months?

Number of Respondents Percent
Increased considerably 1 5.0
Increased somewhat 1 5.0
Remained basically unchanged 18 90.0
Decreased somewhat 0 0.0
Decreased considerably 0 0.0
Total 20 100

21. Considering the entire range of transactions facilitated by your institution, how has the use of financial leverage by each of the following types of clients changed over the past three months?

  1. Mutual funds
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 1 5.0
    Remained basically unchanged 19 95.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 20 100

  2. ETFs
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 19 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 19 100

  3. Pension plans
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 20 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 20 100

  4. Endowments
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 19 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 19 100

22. How has the provision of differential terms by your institution to most-favored (as a function of breadth, duration, and extent of relationship) mutual funds, ETFs, pension plans, and endowments changed over the past three months?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 1 5.3
Remained basically unchanged 18 94.7
Decreased somewhat 0 0.0
Decreased considerably 0 0.0
Total 19 100


Insurance Companies

23. Over the past three months, how have the price terms (for example, financing rates) offered to insurance companies as reflected across the entire spectrum of securities financing and OTC derivatives transaction types changed, regardless of nonprice terms?

Number of Respondents Percent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 19 100.0
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 19 100

24. Over the past three months, how has your use of nonprice terms (for example, haircuts, maximum maturity, covenants, cure periods, cross-default provisions or other documentation features) with respect to insurance companies across the entire spectrum of securities financing and OTC derivatives transaction types changed, regardless of price terms?

Number of Respondents Percent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 18 90.0
Eased somewhat 2 10.0
Eased considerably 0 0.0
Total 20 100

25. To the extent that the price or nonprice terms applied to insurance companies have tightened or eased over the past three months (as reflected in your responses to questions 23 and 24) what are the most important reasons for the change?

  1. Possible reasons for tightening
    1. Deterioration in current or expected financial strength of counterparties
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    2. Reduced willingness of your institution to take on risk
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    3. Adoption of more-stringent market conventions (that is, collateral terms and agreements, ISDA protocols)
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    4. Higher internal treasury charges for funding
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    5. Diminished availability of balance sheet or capital at your institution
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    6. Worsening in general market liquidity and functioning
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    7. Less-aggressive competition from other institutions
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

  2. Possible reasons for easing
    1. Improvement in current or expected financial strength of counterparties
      Number of Respondents Percent
      Very important 1 100.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 1 100

    2. Increased willingness of your institution to take on risk
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    3. Adoption of less-stringent market conventions (that is, collateral terms and agreements, ISDA protocols)
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    4. Lower internal treasury charges for funding
      Number of Respondents Percent
      Very important 1 100.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 1 100

    5. Increased availability of balance sheet or capital at your institution
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 1 100.0
      Not important 0 0.0
      Total 1 100

    6. Improvement in general market liquidity and functioning
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 1 100.0
      Total 1 100

    7. More-aggressive competition from other institutions
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 1 100.0
      Not important 0 0.0
      Total 1 100

26. How has the intensity of efforts by insurance companies to negotiate more-favorable price and nonprice terms changed over the past three months?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 3 15.0
Remained basically unchanged 17 85.0
Decreased somewhat 0 0.0
Decreased considerably 0 0.0
Total 20 100

27. Considering the entire range of transactions facilitated by your institution for such clients, how has the use of financial leverage by insurance companies changed over the past three months?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 1 5.0
Remained basically unchanged 19 95.0
Decreased somewhat 0 0.0
Decreased considerably 0 0.0
Total 20 100

28. How has the provision of differential terms by your institution to most-favored (as a function of breadth, duration, and extent of relationship) insurance companies changed over the past three months?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 1 5.0
Remained basically unchanged 19 95.0
Decreased somewhat 0 0.0
Decreased considerably 0 0.0
Total 20 100


Separately Managed Accounts Established with Investment Advisers

29. Over the past three months, how have the price terms (for example, financing rates) offered to separately managed accounts established with investment advisers as reflected across the entire spectrum of securities financing and OTC derivatives transaction types changed, regardless of nonprice terms?

Number of Respondents Percent
Tightened considerably 0 0.0
Tightened somewhat 2 11.1
Remained basically unchanged 16 88.9
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 18 100

30. Over the past three months, how has your use of nonprice terms (for example, haircuts, maximum maturity, covenants, cure periods, cross-default provisions or other documentation features) with respect to separately managed accounts established with investment advisers across the entire spectrum of securities financing and OTC derivatives transaction types changed, regardless of price terms?

Number of Respondents Percent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 17 94.4
Eased somewhat 1 5.6
Eased considerably 0 0.0
Total 18 100

31. To the extent that the price or nonprice terms applied to separately managed accounts established with investment advisers have tightened or eased over the past three months (as reflected in your responses to questions 29 and 30), what are the most important reasons for the change?

  1. Possible reasons for tightening
    1. Deterioration in current or expected financial strength of counterparties
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    2. Reduced willingness of your institution to take on risk
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    3. Adoption of more-stringent market conventions (that is, collateral terms and agreements, ISDA protocols)
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    4. Higher internal treasury charges for funding
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    5. Diminished availability of balance sheet or capital at your institution
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 1 100.0
      Not important 0 0.0
      Total 1 100

    6. Worsening in general market liquidity and functioning
      Number of Respondents Percent
      Very important 1 100.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 1 100

    7. Less-aggressive competition from other institutions
      Number of Respondents Percent
      Very important 1 100.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 1 100

  2. Possible reasons for easing
    1. Improvement in current or expected financial strength of counterparties
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    2. Increased willingness of your institution to take on risk
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    3. Adoption of less-stringent market conventions (that is, collateral terms and agreements, ISDA protocols)
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    4. Lower internal treasury charges for funding
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    5. Increased availability of balance sheet or capital at your institution
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    6. Improvement in general market liquidity and functioning
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    7. More-aggressive competition from other institutions
      Number of Respondents Percent
      Very important 1 100.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 1 100

32. How has the intensity of efforts by investment advisers to negotiate more-favorable price and nonprice terms on behalf of separately managed accounts changed over the past three months?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 0 0.0
Remained basically unchanged 18 100.0
Decreased somewhat 0 0.0
Decreased considerably 0 0.0
Total 18 100

33. Considering the entire range of transactions facilitated by your institution for such clients, how has the use of financial leverage by separately managed accounts established with investment advisers changed over the past three months?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 0 0.0
Remained basically unchanged 17 94.4
Decreased somewhat 1 5.6
Decreased considerably 0 0.0
Total 18 100

34. How has the provision of differential terms by your institution to separately managed accounts established with most-favored (as a function of breadth, duration, and extent of relationship) investment advisers changed over the past three months?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 1 5.6
Remained basically unchanged 17 94.4
Decreased somewhat 0 0.0
Decreased considerably 0 0.0
Total 18 100


Nonfinancial Corporations

35. Over the past three months, how have the price terms (for example, financing rates) offered to nonfinancial corporations as reflected across the entire spectrum of securities financing and OTC derivatives transaction types changed, regardless of nonprice terms?

Number of Respondents Percent
Tightened considerably 0 0.0
Tightened somewhat 2 10.0
Remained basically unchanged 18 90.0
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 20 100

36. Over the past three months, how has your use of nonprice terms (for example, haircuts, maximum maturity, covenants, cure periods, cross-default provisions or other documentation features) with respect to nonfinancial corporations across the entire spectrum of securities financing and OTC derivatives transaction types changed, regardless of price terms?

Number of Respondents Percent
Tightened considerably 0 0.0
Tightened somewhat 1 5.0
Remained basically unchanged 19 95.0
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 20 100

37. To the extent that the price or nonprice terms applied to nonfinancial corporations have tightened or eased over the past three months (as reflected in your responses to questions 35 and 36) what are the most important reasons for the change?

  1. Possible reasons for tightening
    1. Deterioration in current or expected financial strength of counterparties
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    2. Reduced willingness of your institution to take on risk
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    3. Adoption of more-stringent market conventions (that is, collateral terms and agreements, ISDA protocols)
      Number of Respondents Percent
      Very important 1 100.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 1 100

    4. Higher internal treasury charges for funding
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    5. Diminished availability of balance sheet or capital at your institution
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    6. Worsening in general market liquidity and functioning
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    7. Less-aggressive competition from other institutions
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

  2. Possible reasons for easing
    1. Improvement in current or expected financial strength of counterparties
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    2. Increased willingness of your institution to take on risk
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    3. Adoption of less-stringent market conventions (that is, collateral terms and agreements, ISDA protocols)
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    4. Lower internal treasury charges for funding
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    5. Increased availability of balance sheet or capital at your institution
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    6. Improvement in general market liquidity and functioning
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

    7. More-aggressive competition from other institutions
      Number of Respondents Percent
      Very important 0 0.0
      Somewhat important 0 0.0
      Not important 0 0.0
      Total 0 100

38. How has the intensity of efforts by nonfinancial corporations to negotiate more-favorable price and nonprice terms changed over the past three months?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 1 5.0
Remained basically unchanged 19 95.0
Decreased somewhat 0 0.0
Decreased considerably 0 0.0
Total 20 100


Mark and Collateral Disputes

39. Over the past three months, how has the volume of mark and collateral disputes with clients of each of the following types changed?

  1. Dealers and other financial intermediaries
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 17 85.0
    Decreased somewhat 3 15.0
    Decreased considerably 0 0.0
    Total 20 100

  2. Hedge funds
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 19 95.0
    Decreased somewhat 1 5.0
    Decreased considerably 0 0.0
    Total 20 100

  3. Trading REITs
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 15 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 15 100

  4. Mutual funds, ETFs, pension plans, and endowments
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 1 5.3
    Remained basically unchanged 18 94.7
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 19 100

  5. Insurance companies
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 1 5.0
    Remained basically unchanged 19 95.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 20 100

  6. Separately managed accounts established with investment advisers
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 19 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 19 100

  7. Nonfinancial corporations
    Number of Respondents Percent
    Increased considerably 1 5.9
    Increased somewhat 1 5.9
    Remained basically unchanged 14 82.4
    Decreased somewhat 1 5.9
    Decreased considerably 0 0.0
    Total 17 100

40. Over the past three months, how has the duration and persistence of mark and collateral disputes with clients of each of the following types changed?

  1. Dealers and other financial intermediaries
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 17 85.0
    Decreased somewhat 3 15.0
    Decreased considerably 0 0.0
    Total 20 100

  2. Hedge funds
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 18 90.0
    Decreased somewhat 2 10.0
    Decreased considerably 0 0.0
    Total 20 100

  3. Trading REITs
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 15 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 15 100

  4. Mutual funds, ETFs, pension plans, and endowments
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 1 5.3
    Remained basically unchanged 17 89.5
    Decreased somewhat 1 5.3
    Decreased considerably 0 0.0
    Total 19 100

  5. Insurance companies
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 1 5.0
    Remained basically unchanged 18 90.0
    Decreased somewhat 0 0.0
    Decreased considerably 1 5.0
    Total 20 100

  6. Separately managed accounts established with investment advisers
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 1 5.3
    Remained basically unchanged 17 89.5
    Decreased somewhat 0 0.0
    Decreased considerably 1 5.3
    Total 19 100

  7. Nonfinancial corporations
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 13 81.2
    Decreased somewhat 3 18.8
    Decreased considerably 0 0.0
    Total 16 100

Back to section top


Over-the-Counter Derivatives

In this Section:

Questions 41 through 51 ask about OTC derivatives trades. Question 41 focuses on nonprice terms applicable to new and renegotiated master agreements. Questions 42 through 48 ask about the initial margin requirements for most-favored and average clients applicable to different types of contracts: Question 42 focuses on foreign exchange (FX); question 43 on interest rates; question 44 on equity; question 45 on contracts referencing corporate credits (single-name and indexes); question 46 on credit derivatives referencing structured products such as mortgage-backed securities (MBS) and asset-backed securities (ABS) (specific tranches and indexes); question 47 on commodities; and question 48 on total return swaps (TRS) referencing nonsecurities (such as bank loans, including, for example, commercial and industrial loans and mortgage whole loans). Question 49 asks about posting of nonstandard collateral pursuant to OTC derivatives contracts. Questions 50 and 51 focus on mark and collateral disputes involving contracts of each of the aforementioned types.

If your institution’s terms have tightened or eased over the past three months, please so report them regardless of how they stand relative to longer-term norms. Please focus your response on dollar-denominated instruments; if material differences exist with respect to instruments denominated in other currencies, please explain in the appropriate comment space.


New and Renegotiated Master Agreements

41. Over the past three months, how have nonprice terms incorporated in new or renegotiated OTC derivatives master agreements put in place with your institution's client changed?

  1. Requirements, timelines, and thresholds for posting additional margin
    Number of Respondents Percent
    Tightened considerably 0 0.0
    Tightened somewhat 1 5.3
    Remained basically unchanged 18 94.7
    Eased somewhat 0 0.0
    Eased considerably 0 0.0
    Total 19 100

  2. Acceptable collateral
    Number of Respondents Percent
    Tightened considerably 0 0.0
    Tightened somewhat 2 10.5
    Remained basically unchanged 15 78.9
    Eased somewhat 2 10.5
    Eased considerably 0 0.0
    Total 19 100

  3. Recognition of portfolio or diversification benefits (including from securities financing trades where appropriate agreements are in place)
    Number of Respondents Percent
    Tightened considerably 0 0.0
    Tightened somewhat 0 0.0
    Remained basically unchanged 17 94.4
    Eased somewhat 1 5.6
    Eased considerably 0 0.0
    Total 18 100

  4. Triggers and covenants
    Number of Respondents Percent
    Tightened considerably 0 0.0
    Tightened somewhat 0 0.0
    Remained basically unchanged 18 94.7
    Eased somewhat 1 5.3
    Eased considerably 0 0.0
    Total 19 100

  5. Other documentation features (including cure periods and cross-default provisions)
    Number of Respondents Percent
    Tightened considerably 0 0.0
    Tightened somewhat 0 0.0
    Remained basically unchanged 19 100.0
    Eased somewhat 0 0.0
    Eased considerably 0 0.0
    Total 19 100


Initial Margin

42. Over the past three months, how have initial margin requirements set by your institution with respect to OTC FX derivatives changed?

  1. Initial margin requirements for average clients
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 1 5.9
    Remained basically unchanged 16 94.1
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 17 100

  2. Initial margin requirements for most-favored clients, as a consequence of breadth, duration, and/or extent of relationship
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 1 5.9
    Remained basically unchanged 16 94.1
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 17 100

43. Over the past three months, how have initial margin requirements set by your institution with respect to OTC interest rate derivatives changed?

  1. Initial margin requirements for average clients
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 18 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 18 100

  2. Initial margin requirements for most-favored clients, as a consequence of breadth, duration, and/or extent of relationship
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 17 94.4
    Decreased somewhat 1 5.6
    Decreased considerably 0 0.0
    Total 18 100

44. Over the past three months, how have initial margin requirements set by your institution with respect to OTC equity derivatives changed?

  1. Initial margin requirements for average clients
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 1 6.2
    Remained basically unchanged 15 93.8
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 16 100

  2. Initial margin requirements for most-favored clients, as a consequence of breadth, duration, and/or extent of relationship
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 1 6.2
    Remained basically unchanged 15 93.8
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 16 100

45. Over the past three months, how have initial margin requirements set by your institution with respect to OTC credit derivatives referencing corporates (single-name corporates or corporate indexes) changed?

  1. Initial margin requirements for average clients
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 16 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 16 100

  2. Initial margin requirements for most-favored clients, as a consequence of breadth, duration, and/or extent of relationship
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 16 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 16 100

46. Over the past three months, how have initial margin requirements set by your institution with respect to OTC credit derivatives referencing securitized products (such as specific ABS or MBS tranches and associated indexes) changed?

  1. Initial margin requirements for average clients
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 13 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 13 100

  2. Initial margin requirements for most-favored clients, as a consequence of breadth, duration, and/or extent of relationship
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 13 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 13 100

47. Over the past three months, how have initial margin requirements set by your institution with respect to OTC commodity derivatives changed?

  1. Initial margin requirements for average clients
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 15 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 15 100

  2. Initial margin requirements for most-favored clients, as a consequence of breadth, duration, and/or extent of relationship
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 15 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 15 100

48. Over the past three months, how have initial margin requirements set by your institution with respect to TRS referencing nonsecurities (such as bank loans, including, for example, commercial and industrial loans and mortgage whole loans) changed?

  1. Initial margin requirements for average clients
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 12 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 12 100

  2. Initial margin requirements for most-favored clients, as a consequence of breadth, duration, and/or extent of relationship
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 11 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 11 100


Nonstandard Collateral

49. Over the past three months, how has the posting of nonstandard collateral (that is, other than cash and U.S. Treasury securities) as permitted under relevant agreements changed?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 1 5.0
Remained basically unchanged 19 95.0
Decreased somewhat 0 0.0
Decreased considerably 0 0.0
Total 20 100


Mark and Collateral Disputes

50. Over the past three months, how has the volume of mark and collateral disputes relating to contracts of each of the following types changed?

  1. FX
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 2 11.8
    Remained basically unchanged 14 82.4
    Decreased somewhat 1 5.9
    Decreased considerably 0 0.0
    Total 17 100

  2. Interest rate
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 1 5.6
    Remained basically unchanged 15 83.3
    Decreased somewhat 2 11.1
    Decreased considerably 0 0.0
    Total 18 100

  3. Equity
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 1 6.2
    Remained basically unchanged 14 87.5
    Decreased somewhat 1 6.2
    Decreased considerably 0 0.0
    Total 16 100

  4. Credit referencing corporates
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 16 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 16 100

  5. Credit referencing securitized products including MBS and ABS
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 13 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 13 100

  6. Commodity
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 1 6.2
    Remained basically unchanged 15 93.8
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 16 100

  7. TRS referencing nonsecurities (such as bank loans, including, for example, commercial and industrial loans and mortgage whole loans)
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 10 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 10 100

51. Over the past three months, how has the duration and persistence of mark and collateral disputes relating to contracts of each of the following types changed?

  1. FX
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 1 5.9
    Remained basically unchanged 15 88.2
    Decreased somewhat 1 5.9
    Decreased considerably 0 0.0
    Total 17 100

  2. Interest rate
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 1 5.6
    Remained basically unchanged 15 83.3
    Decreased somewhat 2 11.1
    Decreased considerably 0 0.0
    Total 18 100

  3. Equity
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 15 93.8
    Decreased somewhat 1 6.2
    Decreased considerably 0 0.0
    Total 16 100

  4. Credit referencing corporates
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 16 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 16 100

  5. Credit referencing securitized products including MBS and ABS
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 13 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 13 100

  6. Commodity
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 1 6.2
    Remained basically unchanged 15 93.8
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 16 100

  7. TRS referencing nonsecurities (such as bank loans, including, for example, commercial and industrial loans and mortgage whole loans)
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 10 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 10 100

Back to section top


Securities Financing

In this Section:

Questions 52 through 79 ask about securities funding at your institution--that is, lending to clients collateralized by securities. Such activities may be conducted on a "repo" desk, on a trading desk engaged in facilitation for institutional clients and/or proprietary transactions, on a funding desk, or on a prime brokerage platform. Questions 52 through 55 focus on lending against high-grade corporate bonds; questions 56 through 59 on lending against high-yield corporate bonds; questions 60 and 61 on lending against equities (including through stock loan); questions 62 through 65 on lending against agency residential mortgage-backed securities (agency RMBS); questions 66 through 69 on lending against non-agency residential mortgage-backed securities (non-agency RMBS); questions 70 through 73 on lending against commercial mortgage-backed securities (CMBS); and questions 74 through 77 on consumer ABS (for example, backed by credit card receivables or auto loans). Questions 78 and 79 ask about mark and collateral disputes for lending backed by each of the aforementioned contract types.

If your institution’s terms have tightened or eased over the past three months, please so report them regardless of how they stand relative to longer-term norms. Please focus your response on dollar-denominated instruments; if material differences exist with respect to instruments denominated in other currencies, please explain in the appropriate comment space.


High-Grade Corporate Bonds

52. Over the past three months, how have the terms under which high-grade corporate bonds are funded changed?

  1. Terms for average clients
    1. Maximum amount of funding
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 2 12.5
      Remained basically unchanged 14 87.5
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 16 100

    2. Maximum maturity
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 0 0.0
      Remained basically unchanged 16 100.0
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 16 100

    3. Haircuts
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 0 0.0
      Remained basically unchanged 16 100.0
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 16 100

    4. Collateral spreads over relevant benchmark (effective financing rates)
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 2 13.3
      Remained basically unchanged 12 80.0
      Eased somewhat 1 6.7
      Eased considerably 0 0.0
      Total 15 100

  2. Terms for most-favored clients, as a consequence of breadth, duration and/or extent of relationship
    1. Maximum amount of funding
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 0 0.0
      Remained basically unchanged 16 100.0
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 16 100

    2. Maximum maturity
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 0 0.0
      Remained basically unchanged 16 100.0
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 16 100

    3. Haircuts
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 0 0.0
      Remained basically unchanged 16 100.0
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 16 100

    4. Collateral spreads over relevant benchmark (effective financing rates)
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 0 0.0
      Remained basically unchanged 14 93.3
      Eased somewhat 1 6.7
      Eased considerably 0 0.0
      Total 15 100

53. Over the past three months, how has demand for funding of high-grade corporate bonds by your institution's clients changed?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 0 0.0
Remained basically unchanged 14 87.5
Decreased somewhat 1 6.2
Decreased considerably 1 6.2
Total 16 100

54. Over the past three months, how has demand for term funding with a maturity greater than 30 days of high-grade corporate bonds by your institution's clients changed?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 1 6.2
Remained basically unchanged 14 87.5
Decreased somewhat 0 0.0
Decreased considerably 1 6.2
Total 16 100

55. Over the past three months, how have liquidity and functioning in the high-grade corporate bond market changed?

Number of Respondents Percent
Improved considerably 0 0.0
Improved somewhat 0 0.0
Remained basically unchanged 13 81.2
Deteriorated somewhat 1 6.2
Deteriorated considerably 2 12.5
Total 16 100


High-Yield Corporate Bonds

56. Over the past three months, how have the terms under which high-yield corporate bonds are funded changed?

  1. Terms for average clients
    1. Maximum amount of funding
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 3 18.8
      Remained basically unchanged 13 81.2
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 16 100

    2. Maximum maturity
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 2 12.5
      Remained basically unchanged 14 87.5
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 16 100

    3. Haircuts
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 2 12.5
      Remained basically unchanged 14 87.5
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 16 100

    4. Collateral spreads over relevant benchmark (effective financing rates)
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 6 40.0
      Remained basically unchanged 9 60.0
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 15 100

  2. Terms for most-favored clients, as a consequence of breadth, duration and/or extent of relationship
    1. Maximum amount of funding
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 1 6.2
      Remained basically unchanged 15 93.8
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 16 100

    2. Maximum maturity
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 1 6.2
      Remained basically unchanged 15 93.8
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 16 100

    3. Haircuts
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 1 6.2
      Remained basically unchanged 15 93.8
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 16 100

    4. Collateral spreads over relevant benchmark (effective financing rates)
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 3 20.0
      Remained basically unchanged 12 80.0
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 15 100

57. Over the past three months, how has demand for funding of high-yield corporate bonds by your institution's clients changed?

Number of Respondents Percent
Increased considerably 1 5.9
Increased somewhat 1 5.9
Remained basically unchanged 14 82.4
Decreased somewhat 1 5.9
Decreased considerably 0 0.0
Total 17 100

58. Over the past three months, how has demand for term funding with a maturity greater than 30 days of high-yield corporate bonds by your institution's clients changed?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 2 11.8
Remained basically unchanged 15 88.2
Decreased somewhat 0 0.0
Decreased considerably 0 0.0
Total 17 100

59. Over the past three months, how have liquidity and functioning in the high-yield corporate bond market changed?

Number of Respondents Percent
Improved considerably 0 0.0
Improved somewhat 0 0.0
Remained basically unchanged 11 64.7
Deteriorated somewhat 5 29.4
Deteriorated considerably 1 5.9
Total 17 100


Equities (Including through Stock Loan)

60. Over the past three months, how have the terms under which equities are funded (including through stock loan) changed?

  1. Terms for average clients
    1. Maximum amount of funding
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 0 0.0
      Remained basically unchanged 19 95.0
      Eased somewhat 1 5.0
      Eased considerably 0 0.0
      Total 20 100

    2. Maximum maturity
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 0 0.0
      Remained basically unchanged 20 100.0
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 20 100

    3. Haircuts
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 0 0.0
      Remained basically unchanged 20 100.0
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 20 100

    4. Collateral spreads over relevant benchmark (effective financing rates)
      Number of Respondents Percent
      Tightened considerably 1 5.0
      Tightened somewhat 2 10.0
      Remained basically unchanged 16 80.0
      Eased somewhat 1 5.0
      Eased considerably 0 0.0
      Total 20 100

  2. Terms for most-favored clients, as a consequence of breadth, duration and/or extent of relationship
    1. Maximum amount of funding
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 0 0.0
      Remained basically unchanged 19 95.0
      Eased somewhat 1 5.0
      Eased considerably 0 0.0
      Total 20 100

    2. Maximum maturity
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 0 0.0
      Remained basically unchanged 19 95.0
      Eased somewhat 1 5.0
      Eased considerably 0 0.0
      Total 20 100

    3. Haircuts
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 0 0.0
      Remained basically unchanged 20 100.0
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 20 100

    4. Collateral spreads over relevant benchmark (effective financing rates)
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 1 5.3
      Remained basically unchanged 18 94.7
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 19 100

61. Over the past three months, how has demand for funding of equities (including through stock loan) by your institution's clients changed?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 2 10.0
Remained basically unchanged 18 90.0
Decreased somewhat 0 0.0
Decreased considerably 0 0.0
Total 20 100


Agency Residential Mortgage-Backed Securities

62. Over the past three months, how have the terms under which agency RMBS are funded changed?

  1. Terms for average clients
    1. Maximum amount of funding
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 2 11.1
      Remained basically unchanged 15 83.3
      Eased somewhat 1 5.6
      Eased considerably 0 0.0
      Total 18 100

    2. Maximum maturity
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 1 5.6
      Remained basically unchanged 16 88.9
      Eased somewhat 1 5.6
      Eased considerably 0 0.0
      Total 18 100

    3. Haircuts
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 1 5.6
      Remained basically unchanged 17 94.4
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 18 100

    4. Collateral spreads over relevant benchmark (effective financing rates)
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 3 17.6
      Remained basically unchanged 14 82.4
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 17 100

  2. Terms for most-favored clients, as a consequence of breadth, duration and/or extent of relationship
    1. Maximum amount of funding
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 1 5.6
      Remained basically unchanged 16 88.9
      Eased somewhat 1 5.6
      Eased considerably 0 0.0
      Total 18 100

    2. Maximum maturity
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 0 0.0
      Remained basically unchanged 17 94.4
      Eased somewhat 1 5.6
      Eased considerably 0 0.0
      Total 18 100

    3. Haircuts
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 1 5.6
      Remained basically unchanged 16 88.9
      Eased somewhat 1 5.6
      Eased considerably 0 0.0
      Total 18 100

    4. Collateral spreads over relevant benchmark (effective financing rates)
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 1 5.9
      Remained basically unchanged 16 94.1
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 17 100

63. Over the past three months, how has demand for funding of agency RMBS by your institution's clients changed?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 2 11.1
Remained basically unchanged 16 88.9
Decreased somewhat 0 0.0
Decreased considerably 0 0.0
Total 18 100

64. Over the past three months, how has demand for term funding with a maturity greater than 30 days of agency RMBS by your institution's clients changed?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 0 0.0
Remained basically unchanged 17 94.4
Decreased somewhat 1 5.6
Decreased considerably 0 0.0
Total 18 100

65. Over the past three months, how have liquidity and functioning in the agency RMBS market changed?

Number of Respondents Percent
Improved considerably 0 0.0
Improved somewhat 0 0.0
Remained basically unchanged 15 83.3
Deteriorated somewhat 3 16.7
Deteriorated considerably 0 0.0
Total 18 100


Non-Agency Residential Mortgage-Backed Securities

66. Over the past three months, how have the terms under which non-agency RMBS are funded changed?

  1. Terms for average clients
    1. Maximum amount of funding
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 2 13.3
      Remained basically unchanged 12 80.0
      Eased somewhat 1 6.7
      Eased considerably 0 0.0
      Total 15 100

    2. Maximum maturity
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 1 6.7
      Remained basically unchanged 12 80.0
      Eased somewhat 2 13.3
      Eased considerably 0 0.0
      Total 15 100

    3. Haircuts
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 3 20.0
      Remained basically unchanged 11 73.3
      Eased somewhat 1 6.7
      Eased considerably 0 0.0
      Total 15 100

    4. Collateral spreads over relevant benchmark (effective financing rates)
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 5 35.7
      Remained basically unchanged 9 64.3
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 14 100

  2. Terms for most-favored clients, as a consequence of breadth, duration and/or extent of relationship
    1. Maximum amount of funding
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 0 0.0
      Remained basically unchanged 13 86.7
      Eased somewhat 2 13.3
      Eased considerably 0 0.0
      Total 15 100

    2. Maximum maturity
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 1 6.7
      Remained basically unchanged 11 73.3
      Eased somewhat 3 20.0
      Eased considerably 0 0.0
      Total 15 100

    3. Haircuts
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 3 20.0
      Remained basically unchanged 11 73.3
      Eased somewhat 1 6.7
      Eased considerably 0 0.0
      Total 15 100

    4. Collateral spreads over relevant benchmark (effective financing rates)
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 4 28.6
      Remained basically unchanged 10 71.4
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 14 100

67. Over the past three months, how has demand for funding of non-agency RMBS by your institution's clients changed?

Number of Respondents Percent
Increased considerably 1 6.7
Increased somewhat 5 33.3
Remained basically unchanged 8 53.3
Decreased somewhat 1 6.7
Decreased considerably 0 0.0
Total 15 100

68. Over the past three months, how has demand for term funding with a maturity greater than 30 days of non-agency RMBS by your institution's clients changed?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 7 46.7
Remained basically unchanged 8 53.3
Decreased somewhat 0 0.0
Decreased considerably 0 0.0
Total 15 100

69. Over the past three months, how have liquidity and functioning in the non-agency RMBS market changed?

Number of Respondents Percent
Improved considerably 0 0.0
Improved somewhat 2 13.3
Remained basically unchanged 10 66.7
Deteriorated somewhat 3 20.0
Deteriorated considerably 0 0.0
Total 15 100


Commercial Mortgage-Backed Securities

70. Over the past three months, how have the terms under which CMBS are funded changed?

  1. Terms for average clients
    1. Maximum amount of funding
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 1 7.7
      Remained basically unchanged 11 84.6
      Eased somewhat 1 7.7
      Eased considerably 0 0.0
      Total 13 100

    2. Maximum maturity
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 0 0.0
      Remained basically unchanged 12 92.3
      Eased somewhat 1 7.7
      Eased considerably 0 0.0
      Total 13 100

    3. Haircuts
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 1 7.7
      Remained basically unchanged 11 84.6
      Eased somewhat 1 7.7
      Eased considerably 0 0.0
      Total 13 100

    4. Collateral spreads over relevant benchmark (effective financing rates)
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 4 30.8
      Remained basically unchanged 9 69.2
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 13 100

  2. Terms for most-favored clients, as a consequence of breadth, duration and/or extent of relationship
    1. Maximum amount of funding
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 1 7.7
      Remained basically unchanged 11 84.6
      Eased somewhat 1 7.7
      Eased considerably 0 0.0
      Total 13 100

    2. Maximum maturity
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 0 0.0
      Remained basically unchanged 12 92.3
      Eased somewhat 1 7.7
      Eased considerably 0 0.0
      Total 13 100

    3. Haircuts
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 1 7.7
      Remained basically unchanged 11 84.6
      Eased somewhat 1 7.7
      Eased considerably 0 0.0
      Total 13 100

    4. Collateral spreads over relevant benchmark (effective financing rates)
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 3 23.1
      Remained basically unchanged 10 76.9
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 13 100

71. Over the past three months, how has demand for funding of CMBS by your institution's clients changed?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 2 15.4
Remained basically unchanged 9 69.2
Decreased somewhat 2 15.4
Decreased considerably 0 0.0
Total 13 100

72. Over the past three months, how has demand for term funding with a maturity greater than 30 days of CMBS by your institution's clients changed?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 3 23.1
Remained basically unchanged 10 76.9
Decreased somewhat 0 0.0
Decreased considerably 0 0.0
Total 13 100

73. Over the past three months, how have liquidity and functioning in the CMBS market changed?

Number of Respondents Percent
Improved considerably 0 0.0
Improved somewhat 1 7.7
Remained basically unchanged 7 53.8
Deteriorated somewhat 5 38.5
Deteriorated considerably 0 0.0
Total 13 100


Consumer Asset-Backed Securities

74. Over the past three months, how have the terms under which consumer ABS (for example, backed by credit card receivables or auto loans) are funded changed?

  1. Terms for average clients
    1. Maximum amount of funding
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 1 7.7
      Remained basically unchanged 12 92.3
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 13 100

    2. Maximum maturity
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 0 0.0
      Remained basically unchanged 13 100.0
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 13 100

    3. Haircuts
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 0 0.0
      Remained basically unchanged 12 92.3
      Eased somewhat 1 7.7
      Eased considerably 0 0.0
      Total 13 100

    4. Collateral spreads over relevant benchmark (effective financing rates)
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 3 23.1
      Remained basically unchanged 10 76.9
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 13 100

  2. Terms for most-favored clients, as a consequence of breadth, duration and/or extent of relationship
    1. Maximum amount of funding
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 0 0.0
      Remained basically unchanged 13 100.0
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 13 100

    2. Maximum maturity
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 0 0.0
      Remained basically unchanged 13 100.0
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 13 100

    3. Haircuts
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 0 0.0
      Remained basically unchanged 12 92.3
      Eased somewhat 1 7.7
      Eased considerably 0 0.0
      Total 13 100

    4. Collateral spreads over relevant benchmark (effective financing rates)
      Number of Respondents Percent
      Tightened considerably 0 0.0
      Tightened somewhat 2 15.4
      Remained basically unchanged 11 84.6
      Eased somewhat 0 0.0
      Eased considerably 0 0.0
      Total 13 100

75. Over the past three months, how has demand for funding of consumer ABS by your institution's clients changed?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 1 7.7
Remained basically unchanged 11 84.6
Decreased somewhat 1 7.7
Decreased considerably 0 0.0
Total 13 100

76. Over the past three months, how has demand for term funding with a maturity greater than 30 days of consumer ABS by your institution's clients changed?

Number of Respondents Percent
Increased considerably 0 0.0
Increased somewhat 1 7.7
Remained basically unchanged 12 92.3
Decreased somewhat 0 0.0
Decreased considerably 0 0.0
Total 13 100

77. Over the past three months, how have liquidity and functioning in the consumer ABS market changed?

Number of Respondents Percent
Improved considerably 0 0.0
Improved somewhat 0 0.0
Remained basically unchanged 9 69.2
Deteriorated somewhat 3 23.1
Deteriorated considerably 1 7.7
Total 13 100


Mark and Collateral Disputes

78. Over the past three months, how has the volume of mark and collateral disputes relating to lending against each of the following collateral types changed?

  1. High-grade corporate bonds
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 17 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 17 100

  2. High-yield corporate bonds
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 17 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 17 100

  3. Equities
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 17 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 17 100

  4. Agency RMBS
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 18 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 18 100

  5. Non-agency RMBS
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 13 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 13 100

  6. CMBS
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 13 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 13 100

  7. Consumer ABS
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 14 100.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 14 100

79. Over the past three months, how has the duration and persistence of mark and collateral disputes relating to lending against each of the following collateral types changed?

  1. High-grade corporate bonds
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 16 94.1
    Decreased somewhat 1 5.9
    Decreased considerably 0 0.0
    Total 17 100

  2. High-yield corporate bonds
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 16 94.1
    Decreased somewhat 1 5.9
    Decreased considerably 0 0.0
    Total 17 100

  3. Equities
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 16 94.1
    Decreased somewhat 1 5.9
    Decreased considerably 0 0.0
    Total 17 100

  4. Agency RMBS
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 17 94.4
    Decreased somewhat 1 5.6
    Decreased considerably 0 0.0
    Total 18 100

  5. Non-agency RMBS
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 14 93.3
    Decreased somewhat 1 6.7
    Decreased considerably 0 0.0
    Total 15 100

  6. CMBS
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 14 93.3
    Decreased somewhat 1 6.7
    Decreased considerably 0 0.0
    Total 15 100

  7. Consumer ABS
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 0 0.0
    Remained basically unchanged 14 93.3
    Decreased somewhat 1 6.7
    Decreased considerably 0 0.0
    Total 15 100

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Optional Question

Question 80 requests feedback on any other issues you judge to be important relating to credit terms applicable to securities financing transactions and OTC derivatives contracts.

Special Questions

In this Section:

The following special questions are intended to provide better context for interpreting the core set of questions in the previous section, which focus on changes in credit terms over the preceding three months. Unlike the core questions, these special questions will not be included in the survey on an ongoing basis.

In the United States, the G-20 leaders' 2009 commitment that all standardized OTC derivatives contracts should be cleared through central counterparties has been implemented primarily through authority under Title VII of the Dodd-Frank Act. In 2012, the Commodities Futures Trading Commission determined that certain standardized credit and interest rate derivatives products would be subject to mandatory central counterparty clearing. These clearing requirements were phased in over the course of 2013. The following questions seek information on how your clients' use of central counterparty clearing services for OTC derivatives has changed since January 1, 2014. Note that for the purpose of these questions, we use the term "OTC derivatives" to refer to all types of derivatives contracts that have typically been negotiated bilaterally, irrespective of whether the trading of some such contracts has moved to exchanges or electronic trading platforms.

Questions 81 through 88 request information on clients' use of clearing services for clearing-mandated and clearing-eligible (but not mandated) OTC credit and interest rate derivative transactions.


OTC Derivatives subject to Mandatory Clearing

81. Certain credit derivative transactions have become subject to mandatory clearing requirements in selected regulatory jurisdictions. How has your clients' use of USD-denominated OTC credit derivatives subject to mandatory clearing requirements changed since January 1, 2014?

Number of Respondents Percent
Increased considerably 2 10.0
Increased somewhat 7 35.0
Remained basically unchanged 7 35.0
Decreased somewhat 4 20.0
Decreased considerably 0 0.0
Total 20 100

82. To the extent that your clients' use of USD-denominated OTC credit derivatives subject to mandatory clearing requirements has changed relative to January 1, 2014 (as reflected in your response to question 81), what are the most important reasons for this change (select no more than two)?

  1. Possible reasons for increase in use
    1. Need to comply with mandatory clearing requirements
      Number of Respondents Percent
      Very important 7 100.0
      Total 7 100

    2. Other differential regulatory treatment of cleared and noncleared transactions, such as differences in capital requirements or exchange/platform trading requirements
      Number of Respondents Percent
      Very important 0 0.0
      Total 0 100

    3. Counterparty risk mitigation associated with central clearing
      Number of Respondents Percent
      Very important 3 100.0
      Total 3 100

    4. Margin efficiency (for example, through netting benefits) or other cost savings for cleared transactions
      Number of Respondents Percent
      Very important 2 100.0
      Total 2 100

  2. Possible reasons for decrease in use
    1. Lack of access to clearing services
      Number of Respondents Percent
      Very important 0 0.0
      Total 0 100

    2. Differential regulatory treatment of cleared and noncleared transactions, such as differences in capital requirements or exchange/platform trading requirements
      Number of Respondents Percent
      Very important 1 100.0
      Total 1 100

    3. Desire to manage risk exposure to central counterparties
      Number of Respondents Percent
      Very important 0 0.0
      Total 0 100

    4. Higher margin requirements or other costs for cleared transactions
      Number of Respondents Percent
      Very important 3 100.0
      Total 3 100

83. Certain interest rate derivative transactions have become subject to mandatory clearing requirements in selected regulatory jurisdictions. How has your clients' use of USD-denominated OTC interest rate derivatives subject to mandatory clearing requirements changed since January 1, 2014?

Number of Respondents Percent
Increased considerably 5 25.0
Increased somewhat 3 15.0
Remained basically unchanged 10 50.0
Decreased somewhat 2 10.0
Decreased considerably 0 0.0
Total 20 100

84. To the extent that your clients' use of USD-denominated interest rate derivatives subject to mandatory clearing requirements has changed relative to January 1, 2014 (as reflected in your response to question 83), what are the most important reasons for this change (select no more than two)?

  1. Possible reasons for increase in use
    1. Need to comply with mandatory clearing requirements
      Number of Respondents Percent
      Very important 8 100.0
      Total 8 100

    2. Other differential regulatory treatment of cleared and noncleared transactions, such as differences in capital requirements or exchange/platform trading requirements
      Number of Respondents Percent
      Very important 1 100.0
      Total 1 100

    3. Counterparty risk mitigation associated with central clearing
      Number of Respondents Percent
      Very important 1 100.0
      Total 1 100

    4. Margin efficiency (for example, through netting benefits) or other cost savings for cleared transactions
      Number of Respondents Percent
      Very important 1 100.0
      Total 1 100

  2. Possible reasons for decrease in use
    1. Lack of access to clearing services
      Number of Respondents Percent
      Very important 0 0.0
      Total 0 100

    2. Differential regulatory treatment of cleared and noncleared transactions, such as differences in capital requirements or exchange/platform trading requirements
      Number of Respondents Percent
      Very important 2 100.0
      Total 2 100

    3. Desire to manage risk exposure to central counterparties
      Number of Respondents Percent
      Very important 0 0.0
      Total 0 100

    4. Higher margin requirements or other costs for cleared transactions
      Number of Respondents Percent
      Very important 2 100.0
      Total 2 100


OTC Derivatives not subject to Mandatory Clearing but are Eligible to Clear

85. How has your clients' use of central clearing services for USD-denominated OTC credit derivative transactions that are eligible for clearing at one or more central counterparties, but for which clearing is not mandated, changed since January 1, 2014?

Number of Respondents Percent
Increased considerably 2 10.0
Increased somewhat 2 10.0
Remained basically unchanged 14 70.0
Decreased somewhat 2 10.0
Decreased considerably 0 0.0
Total 20 100

86. To the extent that your clients' use of USD-denominated OTC credit derivatives that are eligible for clearing, but for which clearing is not mandated, has changed relative to January 1, 2014 (as reflected in your response to question 85), what are the most important reasons for this change (select no more than two)?

  1. Possible reasons for increase in use
    1. Expansion in scope of clearing-eligible products
      Number of Respondents Percent
      Very important 2 100.0
      Total 2 100

    2. Differential regulatory treatment of cleared and noncleared transactions, such as differences in capital requirements or exchange/platform trading requirements
      Number of Respondents Percent
      Very important 1 100.0
      Total 1 100

    3. Counterparty risk mitigation associated with central clearing
      Number of Respondents Percent
      Very important 0 0.0
      Total 0 100

    4. Margin efficiency (for example, through netting benefits) or other cost savings for cleared transactions
      Number of Respondents Percent
      Very important 2 100.0
      Total 2 100

  2. Possible reasons for decrease in use
    1. Lack of access to clearing services
      Number of Respondents Percent
      Very important 0 0.0
      Total 0 100

    2. Differential regulatory treatment of cleared and noncleared transactions, such as differences in capital requirements or exchange/platform trading requirements
      Number of Respondents Percent
      Very important 0 0.0
      Total 0 100

    3. Desire to manage risk exposure to central counterparties
      Number of Respondents Percent
      Very important 0 0.0
      Total 0 100

    4. Higher margin requirements or other costs for cleared transactions
      Number of Respondents Percent
      Very important 1 100.0
      Total 1 100

87. How has your clients' use of central clearing services for USD-denominated OTC interest rate derivative transactions that are eligible for clearing at one or more central counterparties, but for which clearing is not mandated, changed since January 1, 2014?

Number of Respondents Percent
Increased considerably 2 10.0
Increased somewhat 4 20.0
Remained basically unchanged 12 60.0
Decreased somewhat 2 10.0
Decreased considerably 0 0.0
Total 20 100

88. To the extent that your clients' use of USD-denominated OTC interest rate derivatives that are eligible for clearing, but for which clearing is not mandated, has changed relative to January 1, 2014 (as reflected in your response to question 87), what are the most important reasons for this change (select no more than two)?

  1. Possible reasons for increase in use
    1. Expansion in scope of clearing-eligible products
      Number of Respondents Percent
      Very important 2 100.0
      Total 2 100

    2. Differential regulatory treatment of cleared and noncleared transactions, such as differences in capital requirements or exchange/platform trading requirements
      Number of Respondents Percent
      Very important 1 100.0
      Total 1 100

    3. Counterparty risk mitigation associated with central clearing
      Number of Respondents Percent
      Very important 2 100.0
      Total 2 100

    4. Margin efficiency (for example, through netting benefits) or other cost savings for cleared transactions
      Number of Respondents Percent
      Very important 2 100.0
      Total 2 100

  2. Possible reasons for decrease in use
    1. Lack of access to clearing services
      Number of Respondents Percent
      Very important 0 0.0
      Total 0 100

    2. Differential regulatory treatment of cleared and noncleared transactions, such as differences in capital requirements or exchange/platform trading requirements
      Number of Respondents Percent
      Very important 2 100.0
      Total 2 100

    3. Desire to manage risk exposure to central counterparties
      Number of Respondents Percent
      Very important 0 0.0
      Total 0 100

    4. Higher margin requirements or other costs for cleared transactions
      Number of Respondents Percent
      Very important 1 100.0
      Total 1 100


All OTC Derivatives Eligible to Clear

Questions 89 and 90 request information on different types of clients' use of clearing services for all clearing-eligible OTC derivative products.

89. For each of the client types listed below, indicate how that client type's use of central clearing services for all types of clearing-eligible USD-denominated OTC credit derivative transactions (whether or not they are subject to mandatory clearing requirements) has changed since January 1, 2014. (Please use the following scale: 1 = Increased considerably, 2 = Increased somewhat, 3 = Remained basically unchanged, 4 = Decreased somewhat, 5 = Decreased considerably, or N/A = Not applicable.)

  1. Dealers and other financial intermediaries
    Number of Respondents Percent
    Increased considerably 4 25.0
    Increased somewhat 4 25.0
    Remained basically unchanged 6 37.5
    Decreased somewhat 2 12.5
    Decreased considerably 0 0.0
    Total 16 100

  2. Hedge funds
    Number of Respondents Percent
    Increased considerably 2 13.3
    Increased somewhat 6 40.0
    Remained basically unchanged 5 33.3
    Decreased somewhat 1 6.7
    Decreased considerably 1 6.7
    Total 15 100

  3. Trading real estate investment trusts
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 1 10.0
    Remained basically unchanged 9 90.0
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 10 100

  4. Mutual funds, exchange-traded funds, pension plans, and endowments
    Number of Respondents Percent
    Increased considerably 1 6.7
    Increased somewhat 4 26.7
    Remained basically unchanged 9 60.0
    Decreased somewhat 1 6.7
    Decreased considerably 0 0.0
    Total 15 100

  5. Insurance companies
    Number of Respondents Percent
    Increased considerably 1 6.7
    Increased somewhat 2 13.3
    Remained basically unchanged 10 66.7
    Decreased somewhat 1 6.7
    Decreased considerably 1 6.7
    Total 15 100

  6. Separately managed accounts established with investment advisors
    Number of Respondents Percent
    Increased considerably 1 7.1
    Increased somewhat 6 42.9
    Remained basically unchanged 6 42.9
    Decreased somewhat 0 0.0
    Decreased considerably 1 7.1
    Total 14 100

  7. Nonfinancial corporations
    Number of Respondents Percent
    Increased considerably 1 11.1
    Increased somewhat 0 0.0
    Remained basically unchanged 8 88.9
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 9 100

90. For each of the client types listed below, indicate how that client type's use of central clearing services for all types of clearing-eligible USD-denominated OTC interest rate derivative transactions (whether or not they are subject to mandatory clearing requirements) has changed since January 1, 2014. (Please use the following scale: 1 = Increased considerably, 2 = Increased somewhat, 3 = Remained basically unchanged, 4 = Decreased somewhat, 5 = Decreased considerably, or N/A = Not applicable.)

  1. Dealers and other financial intermediaries
    Number of Respondents Percent
    Increased considerably 4 22.2
    Increased somewhat 5 27.8
    Remained basically unchanged 7 38.9
    Decreased somewhat 2 11.1
    Decreased considerably 0 0.0
    Total 18 100

  2. Hedge funds
    Number of Respondents Percent
    Increased considerably 3 16.7
    Increased somewhat 5 27.8
    Remained basically unchanged 8 44.4
    Decreased somewhat 1 5.6
    Decreased considerably 1 5.6
    Total 18 100

  3. Trading real estate investment trusts
    Number of Respondents Percent
    Increased considerably 0 0.0
    Increased somewhat 2 18.2
    Remained basically unchanged 9 81.8
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 11 100

  4. Mutual funds, exchange-traded funds, pension plans, and endowments
    Number of Respondents Percent
    Increased considerably 2 11.8
    Increased somewhat 4 23.5
    Remained basically unchanged 10 58.8
    Decreased somewhat 1 5.9
    Decreased considerably 0 0.0
    Total 17 100

  5. Insurance companies
    Number of Respondents Percent
    Increased considerably 1 6.2
    Increased somewhat 3 18.8
    Remained basically unchanged 9 56.2
    Decreased somewhat 3 18.8
    Decreased considerably 0 0.0
    Total 16 100

  6. Separately managed accounts established with investment advisors
    Number of Respondents Percent
    Increased considerably 2 12.5
    Increased somewhat 4 25.0
    Remained basically unchanged 9 56.2
    Decreased somewhat 0 0.0
    Decreased considerably 1 6.2
    Total 16 100

  7. Nonfinancial corporations
    Number of Respondents Percent
    Increased considerably 1 7.7
    Increased somewhat 0 0.0
    Remained basically unchanged 12 92.3
    Decreased somewhat 0 0.0
    Decreased considerably 0 0.0
    Total 13 100


Footnotes

1. For questions that ask about credit terms, reported net percentages equal the percentage of institutions that reported tightening terms ("tightened considerably" or "tightened somewhat") minus the percentage of institutions that reported easing terms ("eased considerably" or "eased somewhat"). For questions that ask about demand, reported net fractions equal the percentage of institutions that reported increased demand ("increased considerably" or "increased somewhat") minus the percentage of institutions that reported decreased demand ("decreased considerably" or "decreased somewhat"). Return to text

2. Note that survey respondents were instructed to report changes in liquidity and functioning in the market for the underlying collateral to be funded through repurchase agreements and similar secured financing transactions, not changes in the funding market itself. This question was not asked with respect to equity markets in the core questions. Return to text

3. The survey asks specifically about requirements, timelines, and thresholds for posting additional margin; acceptable collateral; recognition of portfolio or diversification benefits; triggers and covenants; and other documentation features, including cure periods and cross-default provisions. Return to text

4. Contract types included in the survey are OTC foreign exchange derivatives, interest rate derivatives, equity derivatives, credit derivatives, securitized product derivatives, commodity derivatives, and total return swap referencing nonsecurities (such as bank loans). Return to text

5. Question 80, not discussed here, was optional and allowed respondents to provide additional comments. Return to text

6. Dealers could attribute an increase in use to the need to comply with mandatory clearing, other differential regulatory treatment of cleared and noncleared transactions (such as differences in capital requirements or exchange/platform trading requirements), counterparty risk mitigation associated with clearing, or margin efficiency or other costs savings for cleared transactions. When reporting a decrease, dealers could attribute it to lack of access to clearing services, differential regulatory treatment of cleared and noncleared transactions (such as differences in capital requirements or exchange/platform trading requirements), the desire to manage risk exposure to central counterparties, or higher margin requirements or other transaction costs. Respondents could choose up to two reasons for the increase or decrease in usage. Return to text

7. Dealers could attribute an increase in use to expansion in scope of clearing-eligible products, differential regulatory treatment of cleared and noncleared transactions (such as differences in capital requirements or exchange/platform trading requirements), counterparty risk mitigation associated with clearing, or margin efficiency or other costs savings for cleared transactions. When reporting a decrease, dealers could attribute it to lack of access to clearing services, differential regulatory treatment of cleared and noncleared transactions (such as differences in capital requirements or exchange/platform trading requirements), the desire to manage risk exposure to central counterparties, or higher margin requirements or other transaction costs. Respondents could choose up to two reasons for the increase or decrease in usage. Return to text

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Last update: October 1, 2015