Words / C / Business

collateralisation

noun/kəˌlætərəlaɪˈzeɪʃən/

C2CEFR level
80/100Rarity: very rare
TechnicalRegister

The practice of backing a loan or obligation with pledged assets in order to reduce the lender's exposure to loss.

Full collateralisation of the swap meant the bank faced almost no credit risk if the counterparty failed.

Topic: Banking in Business English

Rarity runs from 0 (a word everyone knows) to 100 (almost never seen outside specialist or literary writing). Level is the word's real difficulty on the CEFR scale, from A1 to C2.

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More business words: Banking