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Fed’s December Senior Credit Officer Opinion Survey: Terms tightened for clients exposed to EM

The December 2018 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 questions, the survey included a set of special questions about clients’ exposures and positioning with respect to emerging markets and the effects of the turmoil in emerging markets earlier this year on the quantity and terms of financing offered to clients. The 23 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 November 6, 2018, and November 19, 2018. The core questions asked about changes between September and November 2018.

For hedge fund clients with significant emerging market exposure, roughly one-third of respondents reported a tightening in price and nonprice terms. Roughly one-fifth of respondents, on net, reported a tightening in price and nonprice terms for SMA and nonfinancial corporate clients with significant emerging market exposure.

Fed Survey

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