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In this case, that was impossible — there simply wasn't enough collateral to support the lending..
In this case, that was impossible — there simply wasn't enough collateral to support the lending...
Once the Fed determined that Lehman did not have enough collateral to pay back the loan, the Fed was legally prevented from making the loan.
The assistance provides emergency cash to banks in the euro zone that no longer have enough collateral to borrow money under normal terms from the central bank.
"The I.M.F. has only $200 billion of its own resources, which is not enough collateral," Simon Johnson, a former chief economist of the fund, said.
AIG, notoriously, did not post enough collateral until it was suddenly asked for unaffordable amounts, and seemed to be banking on not having to pay out.Belatedly, financial reform is dealing with these infrastructure flaws, and not just for credit derivatives.
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If Greek bonds are good enough for collateral at the ECB, they ought to be good enough for private investors, too, whatever the (mostly American) rating agencies say.
If they still do not have enough suitable collateral, the E.C.B. should change the rules to allow other types of assets to be accepted.
Michael Hewson of CMC Markets The issue of the €5bn Greece Friday loan repayment to the ECB was brushed aside last night, with Olli Rehn saying that he remained sure that Greek banks had enough available collateral to cover today's Greece t-bill auction.
There is a world of difference between an entrepreneur able to put up enough personal collateral to secure a line of credit and an industry where thousands of VCs have $20 billion-plus burning a hole in their pocket looking for high-risk, no revenue opportunities in which to invest.
"There are already worries," Konczal says, "that U.S. debt will be too low, not too high, to provide enough safe collateral in the next financial crisis".
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