Collateralizing

/kəˈlætərəˌlaɪzɪŋ/ verb

Definition

The process of using property or assets as security for a loan or financial obligation.

Etymology

From Medieval Latin 'collateralis' with English '-izing' (making into). The verb form developed as banking and finance became more sophisticated in the 20th century.

Kelly Says

Wall Street banks became obsessed with collateralizing everything—mortgages, car loans, even credit card debt—bundling them into complex securities that nobody fully understood until the economy crashed.

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