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This type of collateral damage would set workers' compensation insurance back a century.
Apart from cash, the most common type of collateral posted with clearing-houses is government bonds.
Anyone who reads the documentation carefully should be aware of the nature of a fund and the type of collateral.
The Fed's action allows them to expand the type of collateral that can be pledged to include student loans, car loans, home equity loans and credit card debt, as long as it is highly rated.
The size of the margin that is required varies with the type of collateral, the stability of its market price, expectations with regard to its future price, and the credit standing of the borrower.
Tettament said he isn't sure what type of collateral backs the CDO, though he thinks returns exceeded 20 percent last year.It's a pretty common story: investors with big losses behave essentially like gamblers in a casino, trying to double down in order to recover their previous position.
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It was permitted to lend to more institutions and take more types of collateral.
The most common types of collateral used for short-term credit are accounts receivable and inventories.
The central bank also expanded the types of collateral that firms can use in buying Treasury securities at a government auction next week.
Even after its refusal to accept junky Greek bonds as collateral, the Frankfurt-based institution will be extending a lot of money to Greek banks, through different lending facilities and based upon other types of collateral.
On Saturday, Sept. 13, for instance, the Federal Reserve allowed the big banks to pledge new types of collateral in return for overnight capital.
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CEO of Professional Science Editing for Scientists @ prosciediting.com