Collateralize

/kəˈlæt.ər.ə.laɪz/ verb

Definition

To pledge or use something as collateral; to secure a loan by offering property or assets as backup.

Etymology

From 'collateral' + '-ize' (Greek suffix meaning to cause or make). This modern financial term emerged in the 20th century as banking vocabulary expanded.

Kelly Says

'Collateralize' is the verb form that blew up the global economy in 2008—financial institutions 'collateralized' mortgages by bundling them into complex securities, turning the simple 'side-pledge' concept into incomprehensible financial instruments.

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