What Is Collateral Value?

Patrick Curtis

Reviewed by

Patrick Curtis WSO Editorial Board

Expertise:Investment Banking | Private Equity

Collateral Value is the market value of anything used as collateral to support a loan. This can create issues with margin requirements; if the asset begins to lose value the borrower would need to supply additional assets to underpin their loans. This was a large problem in the 2008 financial crisis as CDOs and other securities devalued and the already highly-leveraged firms were required to delever quickly and to raise more assets at a time when their capital was already in short supply.

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Patrick Curtisis a member ofWSO Editorial Boardwhich helps ensure the accuracy of content across top articles on Wall Street Oasis. He has experience in investment banking at Rothschild and private equity at Tailwind Capital along with an MBA from the Wharton School of Business. He is also the founder and current CEO of Wall Street Oasis This content was originally created by memberWallStreetOasis.comand has evolved with the help of our mentors.