2 Financial Collateral:

2.01 The decades preceding the onset of the financial crisis in 2007 were a period of liberalization and rapid expansion of the financial markets. New developments and a steep increase in the collateralization of financial transactions were an integral part of this trend. Financial collateral became a key component of the financial markets. The provision of such collateral, consisting of money and transferable securities, plays a crucial role in the wholesale financial markets, for example where it is used to secure exposures under derivative transactions. It is...