Securitisation is really an arbitrage: with surplus collateral, assets can be bundled into an entity with a supercharged credit rating.
There is a danger that at some point a big commercial bank will run out of the collateral or assets needed for emergency borrowing from the European Central Bank or its relevant national central bank.
Also, there are reports that officials have pledged non-transferable assets as collateral, like protected forests.
He walked out of the meeting when IFC's representatives insisted on including all present and future assets as collateral.
Kingfisher owner Vijay Mallya is struggling to keep the airline afloat and has pledged personal and UB Group assets as collateral against the loans.
The ECB has a pretty generous and broad definition of the assets or collateral it is prepared to take as security for loans to banks.
For existing businesses, that collateral can be existing assets or capital.
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They were on hook to Credit Suisse for a substantial loan and needed to find a way quickly to boost the collateral value of their assets.
That's partly because, faced with this uncertainty over their balance sheets, banks have been forced to rely more heavily on secured funding, pledging their highest quality assets as collateral.
The discount facility bypasses the money markets and allows a far wider range of depository institutions to borrow cash directly from the Fed, with a broader range of assets as collateral.
All of which is to say that central banks have to a large extent displaced the market, providing record volumes of loans to banks, and in return for assets or collateral of increasing diversity and - arguably - diminishing quality.
The Bank of England wants its ECTR - which provides relatively cheap loans, at a minimum interest rate of 0.75%, in return for pretty much any old assets or collateral the banks can provide - to be seen as mainstream funding, not stigmatised emergency funding.
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Carlyle Capital that said while its parent company had participated "actively" in negotiations with lenders and was prepared to provide substantial additional capital if a successful refinancing deal could be reached, negotiations had deteriorated on Wednesday when a pricing service used by some lenders reported a drop in the value of the assets' collateral.
In Europe many funds found that the assets they pledged as collateral in return for financing from Lehman have become trapped in the bankruptcy process as administrators strain to work out which assets genuinely belong to clients.
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Oppenheimer does disclose that it charges its funds 0.08% annually to reinvest their collateral in its OFI Liquid Assets Fund.
When the FDIC and regulators went in audited these financial institutions, they found the net worth had been generated by inflared valuations of assets held as collateral for loans.
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In order to borrow from the ECB, banks need to post collateral, but supplies of eligible assets are limited.
Springleaf has unpledged assets it could offer as collateral in such an exchange, the person said.
It also widened the category of assets banks could advance as collateral to include top-rated mortgage-backed securities.
That said, owning assets that can serve as collateral for an SBA loan will only help you.
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This means making sure high-quality government bonds, say, are not needlessly tied up as collateral for trades where lower-quality assets would be acceptable.
But it stretches credulity to ask us to believe that he hadn't used the assets of his other companies as collateral to shore up his bank.
The most effective national asset-management companies everywhere have powers to bypass the courts when foreclosing on property assets, the most common form of loan collateral in Asia.
To make the deal even sweeter for Lone Star, Merrill is lending it money to complete the deal, using the very same toxic assets it is trying to get rid of as collateral.
Not only have many of those assets dropped substantially in value, the banks also hold collateral against loans and borrowers.
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She apparently used her various assets, including 11 houses in Germany and Switzerland, as collateral.
Lay put up a chunk of his Enron stock and a smaller percentage of his more liquid assets (cash and real estate, for example) as collateral for the loans.
But because the rights to these assets are not legally defined, they cannot be used as collateral for bank loans or as any form of capital useful in establishing and expanding a formal business.
However, there is another important effect which is that one of the reasons why folks want to hold these specific assets is that they are using them as a form of collateral, which provides them with liquidity.
Collateral can include anything from furniture, household appliances or the business's assets.
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