Collateral

RECENT NEWS
Mondo Visione  Mar 15  Comment 
DTCC-Euroclear Global Collateral Ltd (GlobalCollateral), a joint venture of The Depository Trust & Clearing Corporation (DTCC) and Euroclear, today announced the launch of the Inventory Management Service (IMS), a transformative solution that...
Reuters  Mar 15  Comment 
Japan's crisis-racked Toshiba Corp has offered shares in its memory chip unit to creditors as collateral to secure debt refinancing, people briefed on the matter said on Wednesday.
Reuters  Mar 15  Comment 
Japan's crisis-racked Toshiba Corp has offered shares in its memory chip unit to creditors as collateral to secure debt refinancing, people briefed on the matter said on Wednesday.
Mondo Visione  Mar 13  Comment 
CloudMargin, the multi-award winning creator of the world's first web-based collateral and margin management solution, today announced that Nasdaq Clearing has been included into the CloudMargin platform. This will provide Nasdaq Clearing's...
Mondo Visione  Feb 23  Comment 
In its January 17, 2017 decision in Bartko v. SEC (No. 14-1070), the United States Court of Appeals for the D.C. Circuit granted in part a petition for review of a Commission order imposing sanctions for violations of the securities laws.  The...
Mondo Visione  Feb 15  Comment 
Bringing together Collateral Transformation, Risk analytics and Inventory Management for all asset classes Providing direct access to financing markets and collateral upgrade opportunities for all market participants Reducing costs and...
Mondo Visione  Jan 25  Comment 
The Financial Stability Board (FSB) today published two reports: Re-hypothecation and Collateral Re-use: Potential Financial Stability Issues, Market Evolution and Regulatory Approaches – This report describes potential financial stability...
Mondo Visione  Jan 18  Comment 
Four international CSDs develop a Blockchain prototype in cooperation with Deutsche Börse Targeted ‘LA Ledger’ solution to provide fast and efficient mobilisation of collateral Four members of the ‘Liquidity Alliance’ (LA), an...
The Hindu Business Line  Dec 26  Comment 
Aspada Investment Company has invested an undisclosed amount in Arya Collateral Warehousing Services Pvt Ltd, to strengthen the post-harvest value chain of agriculture commodities. The Noida-based ...
Reuters  Dec 23  Comment 
Venezuelan state oil company PDVSA said on Friday it has used 49.9 percent of its shares in U.S. subsidiary Citgo as collateral for loan financing, two months after having...




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Collateral is an asset or assets offered by a borrower in order to procure a loan. Should the borrower default on his payment(s), the lender would take possession of the collateral, which may then be sold to recoup the lender's losses.

Technically, collateral could be any asset, though typically it takes the form of personal property, investment securities, or real estate, the values of which can be readily determined.

Other terms in common use in the market are"margin", "margin asset" and "margin agreement" and similar terms using "credit support" instead of "collateral" or "margin," collateral", "collateral asset" and"collateral agreement." [1]

When a lender offers a loan against collateral offered by the borrower, the lender is said to take a security interest in the collateral. [2]

Examples

  • A woman takes out a mortgage to pay for her home. As collateral, she offers the home itself. Should she default on the loan, the lender (typically a bank) would take possession of the home. The bank may then sell the property to recoup its losses.
  • A man needs a cash loan to pay for several large, immediate expenses. As collateral, he offers the lender his car. Should he default on the loan the lender would take possession of the car, which he or she may sell to recoup losses.
  • In Uruguay, no private bank would accept cattle as collateral for a loan. By contrast, in Kansas, cattle are considered the best collateral for a loan.

14c., "accompanying," also "descended from the same stock," "side by side, "together" "parallel, along the side of" 16c., "colleague, associate." Meaning "thing given as security" is from 1832, Amer.Eng., from plrase collateral security (1720). [3]

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