Understanding the Concept of Collateral Management
Are you worried that unsecured transactions will cause you financial loss? If so, then it is time that you explore the concept of collateral management. Collateral management is a process that aims to reduce credit risk in unsecured financial transactions. The concept of collateral has been used for quite some time. For example, in order to obtain a loan, you might have put up some collateral, such as a car or your home, in order to provide the lender with some security in case you defaulted on the loan. Collateral management, however, has evolved from that simple concept, mostly thanks to advancements in technology. We’re going to discuss some of its complexities in this article.
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