How can you monitor the market value of collateral?
Collateral is any asset that a borrower pledges to a lender as a guarantee of repayment in case of default. Collateral can be cash, securities, real estate, or other valuables. Collateral management is the process of ensuring that the collateral pledged by the borrower matches the value and risk profile of the loan or derivative contract. One of the key aspects of collateral management is monitoring the market value of collateral, which can fluctuate due to changes in prices, interest rates, exchange rates, or credit ratings. In this article, we will discuss how you can monitor the market value of collateral effectively and efficiently.