Financial crises hit sources of collateral like real estate particularly hard, and this has negatively impacted smaller firms' credit scores.
One argument doing the rounds is that the ECB's broad acceptance of collateral before the crisis may actually have added fuel to the fire.
Experts have argued in recent days that an overall loss of trust in those leaders previously seen to be managing the crisis could remain a troubling element of collateral damage resulting from the mishandling of the first rescue package for Cyprus.
So our newest economic superpower may indeed be on its way to some kind of economic crisis, with collateral damage to the world as a whole.
Each time that Europe has been stricken by a crisis, the collateral dimensions of the project have felt the effects, especially those facets related to the construction of a social and civic Europe.
But accepting a wide spectrum of collateral helps in a crisis when banks are reluctant to surrender their liquid assets.
"It's become pretty clear what Goldman has become, and this settlement is an outgrowth of it," says Charles Geisst, a finance professor at Manhattan College and author of "Collateral Damaged," a book on the financial crisis.
As the credit crisis has deepened, the central banks have made more money available against a broader range of collateral for longer periods to a wider group of financial firms.
It is not surprising that a financial crisis involving trillions of dollars of bad loans led to legal conflicts and policy debates about the role of collateral and the sanctity of contracts.
§ 45.7 Segregation of collateral.
