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]] under a [[title transfer collateral arrangement]] or a [[pledged collateral arrangement]] <br /> | [[Collateral]], as a abstract concept, is securities and cash a counterparty puts up as [[credit risk mitigation]] under a [[title transfer collateral arrangement]] or a [[pledged collateral arrangement]]. <br /> | ||
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. | 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 17:33, 9 November 2016
Collateral, as a abstract concept, is securities and cash a counterparty puts up as credit risk mitigation under a title transfer collateral arrangement or a pledged collateral arrangement.
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.