Collateral (finance)
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In
The protection that collateral provides generally allows lenders to offer a lower
If a borrower defaults on a loan (due to
The type of the collateral may be restricted based on the type of the loan (as is the case with auto loans and mortgages); it also can be flexible, such as in the case of collateral-based personal loans.
Concept
Collateral, especially within
Marketable collateral
Reduction of collateral value is the primary risk when securing loans with marketable collateral. Financial institutions closely monitor the market value of any financial assets held as collateral and take appropriate action if the value subsequently declines below the predetermined maximum loan-to-value ratio. The permitted actions are generally specified in a loan agreement or margin agreement.
Tokenization of securities like company shares, pharmaceutical & defence project patents and mining licenses is an emerging novel concept of dynamic investment despite still being considered and classified as relatively experimental. Spektral Investment Bank is currently the only example of above mentioned novel complete tokenization concept via establishment of 800.000.000.00 EU worth in-kind collateral based capital composed of exclusive pharmaceutical & bioceucal patent rights and reserve volume approved mining licenses.
Examples of collateral
Intellectual property such as copyrights, patents, and trademarks, as well as royalty streams from licensing revenue, are increasingly being used as collateral.[6] The use of IP as collateral in IP-backed finance transactions is the subject of a report series at the World Intellectual Property Organization.[7]
See also
References
- ISBN 0-379-11194-2.
- ISBN 0-13-063085-3.)
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- ^ "12 CFR 32.3 - Lending limits". LII / Legal Information Institute. Retrieved 2017-05-10.
- OCLC 1001337977.)
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: CS1 maint: location missing publisher (link) CS1 maint: others (link - ^ "Launch of new WIPO report series on unlocking IP-Backed Finance at Singapore's IP Week, 26 August 2021 – Sharing the Singapore Country Report". www.wipo.int. Retrieved 2021-12-24.