Marketable collateral is the exchange of financial assets, such as stocks and bonds, for a loan between a financial institution and borrower.
Conditions are based upon actual transactions on an auction or similarly available daily bid, or ask price market.
For banks to accept a borrower’s loan proposal, collateral must be equal or greater than 100% of the loan or credit extension amount.
The bank’s total outstanding loans and credit extensions to one borrower may not exceed 15 percent of the bank’s capital and surplus, plus an additional 10 percent of the bank’s capital and surplus.
and take appropriate action if the value subsequently declines below the predetermined maximum loan-to-value ration.