Explain about collateral management

Question

Accepted Answer

Collateral management involves monitoring and managing assets provided as security for financial transactions.

Collateral management ensures that the value of assets provided as collateral is sufficient to cover the associated risks.
It involves tracking the value of collateral, margin calls, and ensuring compliance with regulatory requirements.
Collateral management is crucial in investment banking to mitigate credit risk and ensure the safety of transactions.
Examples of collateral include cash, securities, real estate, and other valuable assets.
Collateral management also involves the process of rehypothecation, where collateral is used as security for multiple transactions.

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