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The insurer (which could be a bank, an investment bank or a hedge fund) is required to post collateral to support its payment obligation, but in the insane credit environment that preceded the credit crisis, this collateral deposit was generally too small.
We can also extend the fully trade credit policy to the partial trade credit policy in which a seller requests its credit-risk customers to pay a fraction of the purchase amount at the time of placing an order as a collateral deposit, and then grants a permissible delay on the rest of the purchase amount.
One alternative to help build your credit is what's known as a secured credit card, which requires a cash collateral deposit that becomes the credit line for that account.
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Kabul Bank often exceeded the limit of what it was allowed to lend on any particular project, and it sometimes skirted collateral and deposit requirements.
According to Afghan bank regulators and American officials, the bank made risky investments, including ones in the Dubai real estate market that collapsed in 2008, as well as questionable loans that skirted collateral and deposit requirements.
The act, by authorizing loans to be made 'on personal security,' cannot be held as limiting the transaction to the personal undertaking of the parties to the note; and it would not be violated if the bank should require as collateral a deposit of bonds or of stocks, either of States, municipalities, or incorporated companies.
A security interest in favor of a Federal Reserve Bank would be recorded on the Federal Reserve Bank's books where, for example, the Federal Reserve Bank made a discount window loan to a depository institution and any Treasury book-entry securities provided by the depository institution as collateral have been deposited to a pledge account on the books of the Federal Reserve Bank.
The Hungarian central bank had to deposit collateral, denominated in euros, with the European Central Bank.
Under the terms of the deal, UBS would pay Paramax 0.155 percent of the $1.31 billion in notes annually for its insurance and Paramax would deposit collateral to back the swap, increasing it if the value of the underlying notes declined.
The use of margin as a risk management tool requires the member to provide collateral against a deposit requirement designed to protect the clearing house against default caused by a significant movement in the price of an instrument or instruments.
§ 150.320 What is acceptable collateral for uninsured deposits?
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