The Board of Governors of the Federal Reserve System conducted its Senior Credit Officer Opinion Survey between August 11 and August 24, 2026, covering credit‑term developments from June through August 2026. Seventeen institutions that account for virtually all dealer financing of dollar‑denominated securities to non‑dealers participated. The survey was prepared by Xin Huang of the Fed’s Division of Research and Statistics, with assistance from staff at the Federal Reserve Bank of New York.
Across all counterparty types, dealers reported that price and non‑price terms on securities‑financing and OTC‑derivatives transactions were essentially unchanged on net. However, about 23.5% of respondents said hedge‑funds intensified efforts to negotiate more favorable terms.
Changes in central‑counterparty (CCP) practices, such as margin requirements and haircuts, were felt to a small degree by 47% of dealers (17.6% to some extent, 29.4% to a minimal extent), while 52.9% said CCP changes did not affect credit terms on bilateral, uncleared trades.
Terms on securities‑financing collateral remained broadly stable, but more than one‑fifth of dealers observed widening spreads for equity financing. Demand for equity funding rose for over one‑third of respondents, and roughly one‑third reported increased demand for both funding and term funding of commercial mortgage‑backed securities (CMBS). Liquidity, market functioning and mark‑to‑collateral disputes were largely unchanged across collateral types.
Leverage levels were generally steady. For hedge‑fund clients, 88.2% of dealers said leverage was unchanged, with 5.9% each reporting a modest increase or decrease. Among trading REITs, 85.7% reported unchanged leverage and 14.3% noted an increase.
Special‑question responses compared current conditions with the past decade for long‑standing dealers. More than one‑third said capital allocated to equities is near the high end of its 10‑year range, and over 75% placed equity capital above the decade’s midpoint. Similar patterns appeared for U.S. Treasury securities (over 25% near the high end, over 50% above midpoint) and corporate bonds (over one‑third near the high end, over 50% above midpoint).
Regarding collateral spreads, nearly three‑quarters of established dealers indicated current equity spreads sit above the 10‑year midpoint, while about one‑third reported the same for corporate‑bond spreads. Treasury‑security spreads were reported as near the midpoint.
In the hedge‑fund leverage segment, two‑thirds of the 15 dealers with at least ten years of HF activity said current HF leverage exceeds the decade’s midpoint. The share is higher for equity‑oriented HFs (over 75%) than for fixed‑income‑oriented HFs (about 50%) and credit‑oriented HFs (one‑third). For ETFs, three‑quarters of the 12 long‑standing dealers reported leverage above the 10‑year midpoint.
The survey provides a detailed snapshot of dealer‑financing conditions, indicating overall stability in credit terms but highlighting modest pressure from hedge‑fund negotiations and widening equity collateral spreads, information that market participants monitor for signs of broader credit‑market dynamics.
