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10 Security Interests

From: Principles of International Financial Law (3rd Edition)

Colin Bamford

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2022. All Rights Reserved.date: 08 August 2022

Subject(s):
Credit — Lien — Mortgage — Pledge — Debt — Netting — Contractual set-off

The chapter discusses the ways in which a creditor can obtain the benefit of the value of an asset to support a debt that he is owed. By way of introduction, it examines the reasons for taking security, the difficulties of terminology, and the issues around registration. It then looks at the different forms of security, drawing a distinction between title-based security (mortgage, charge, pledge, lien, transfer of retention of title, and declaration of trust) and contract-based security, where the creditor looks to an asset as security without having any property interest in the asset. Examples given are set-off, netting, and running accounts. It then discusses reverse security, where the purpose of the arrangements is not to enhance the prospects of the creditor, but to limit the liability of the debtor. It discusses the use of special-purpose vehicles, third party security, and non-recourse and limited-recourse lending.

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