Demand for Securities Funding Rose Last Quarter, Fed Says

Wall Street’s largest dealers saw more demand for funding to buy all types of securities other than equities in the second quarter, according to the Federal Reserve.

More banks said their credit terms “eased somewhat” than “tightened somewhat” in the three months ended in June, compared with the previous quarter, the Fed said today in its quarterly financing survey. Banks cited better market functioning and ease of trading, as well as improved current or expected financial strength of counterparties, as reasons for the looser terms. Increased risk appetite also was listed.