Auto-collateralisation is a
credit
Credit (from Latin verb ''credit'', meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a debt) ...
operation that is or can be triggered, when a buyer does not have sufficient funds to settle a securities transaction, in order to improve its cash position for the next settlement cycle. The credit provided can be secured using securities already held by the buyer (“
collateral
Collateral may refer to:
Business and finance
* Collateral (finance), a borrower's pledge of specific property to a lender, to secure repayment of a loan
* Marketing collateral, in marketing and sales
Arts, entertainment, and media
* ''Collate ...
stocks”) or the securities that are being purchased (“collateral flows”).
See also
*
T2S
T2S (TARGET2-Securities) is a European securities settlement engine which aims to offer centralised delivery-versus-payment (DvP) settlement in central bank funds across all European securities markets. It is important to take note of the fact ...
External links
TARGET2-Securities page on the ECB websiteECB proposal for the T2S Project
Credit
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