The SCOOS provides information about the availability and terms of credit in securities financing and over-the-counter derivatives markets – for example, on credit granted by dealers to counterparties such as hedge funds or insurers to finance investments in securities like commercial mortgage-backed securities or corporate bonds.
In recent years, the SCOOS has suggested relatively stable use of leverage across hedge funds and other counterparties – but this qualitative assessment provides only a high level, and very partial, view.7 An important risk factor during the mid-2000s was the growth in securitization and the creation of so-called high quality collateral.