Collateral: Difference between revisions
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[[Collateral]], as a abstract concept, is securities and cash a counterparty puts up as [[credit risk mitigation]]. <br /> | [[Collateral]], as a abstract concept, is securities and cash a counterparty puts up as [[credit risk mitigation]]. <br /> | ||
A [[collateral contract]] — an even more abstract concept — is a binding agreement which supports or gives a person a right to enter into | A [[collateral contract]] — an even more abstract concept — is a binding agreement which is collateral to — in other words it supports or gives a person a right to enter into a {{tag|contract}}. For example, certain forms of [[option]] — swaptions for example — are [[collateral contract]]s. | ||
Revision as of 17:32, 9 November 2016
Collateral, as a abstract concept, is securities and cash a counterparty puts up as credit risk mitigation.
A collateral contract — an even more abstract concept — is a binding agreement which is collateral to — in other words it supports or gives a person a right to enter into a contract. For example, certain forms of option — swaptions for example — are collateral contracts.