The whole system relies on trust between brokers, rather than paper records or thirdpartyguarantees, with any shortfalls between what goes out and what comes in settled periodically.
According to a recent report by the World Bank, private lenders have granted borrowers more flexibility with loan covenants and demanded fewer third-party guarantees.
Clearly, though, as in the case of third-party guarantees on high-priced works, this is a much more attractive proposition for guarantors when art market confidence is pretty high as it is right now.