Treasury securities are routinely used as trading collateral, and some market analysts projected chaos if the downgrade prompted the clearinghouses to demand additional securities to adjust for the heightened risk.
"Art is very easy to transport around the world," said James Emson, the managing director of the Art Loss Register, who noted that criminal organizations often trade in stolen artworks as collateral in making deals with one another.
To ensure it can do this, the clearing house takes assets from the parties seeking to trade which it uses as collateral for such an event.
The exception in the bill would allow so-called end users of commodities or products that are the subject of a swap to use noncash assets as collateral for the trades.
From Monday, RBS will charge interest to about 70 customers, such as banks and pension funds, on the cash they place with the state-controlled bank as collateral for trading complex financial products.
Even so, from Monday, about 70 RBS customers will start to receive negative rates because they will charged for any cash they place as collateral for trading in complex financial products, such as futures or options.
While the company is still current on its $235 million in bank loans, securities backed by those loans as collateral are trading at about 30 cents on the dollar, down from 70 cents a few years ago, traders in distressed debt say.
He told investors he would use their cash and stock deposits as collateral in trading on their behalf for the hedge fund, the SEC said.
This means making sure high-quality government bonds, say, are not needlessly tied up as collateral for trades where lower-quality assets would be acceptable.
Starting in 1985, the Federal Department of Transportation allowed the major airlines to treat their slots like property that could be sold, traded, leased or even used as collateral for loans.
