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2 Financial Collateral : From Private to Regulatory Law Reform

Thomas Keijser

From: Transnational Securities Law 2e (2nd Edition)

Edited By: Thomas Keijser

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved.date: 30 May 2024

Collateral agreement — Collateral securities — Overcollateralization

This chapter considers the development of the legal framework for financial collateral from the application of traditional law to the private law reform that marked the 1990s and the early years of the new millennium. It discusses the expansion of the collateral markets that went hand in hand with the increased use of market standard documentation for different types of collateral arrangements. It also mentions the first standardized agreements that were developed in the United States (US) and considered as a lex mercatoria for the financial sector. The chapter analyzes the interaction of the phenomena that were part of the realm of private law with regulatory concerns that have emerged in the wake of the global financial crisis. It focuses on the issues of over- and undercollateralization and the treatment of collateral in the context of the resolution of a failing bank.

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