- In tandem with a broad-based rise in demand for funding, financing rates increased noticeably across nearly all types of collateral.
- Compared with last year, respondents’ ability to act as a market-maker in times of stress increased for derivatives, but decreased for debt, asset-backed, and convertible securities.
Price and non-price credit terms and conditions remained largely unchanged between September 2025 and December 2025, with a slight easing of price terms across most counterparties. This easing appeared to be primarily driven by general market liquidity conditions, competition from other institutions, and the financial strength of counterparties. Looking ahead to the first quarter of 2026, some tightening of credit terms was expected across the board, but in particular for hedge funds.Tightening expectations were more pronounced for price terms than non-price terms (Chart 1).
Turning to financing conditions for secured funding, demand for funding increased across all collateral types, especially for domestic and high-quality government bonds. In parallel, financing rates/spreads increased for all types of collateral except asset-backed securities. In addition, the maximum amount and maturity of funding increased for all funding secured against debt instruments (not including convertible securities).