Collateral – Stan Smith Loans http://stansmithloans.com/ Wed, 11 May 2022 20:09:32 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://stansmithloans.com/wp-content/uploads/2021/07/favicon-23.png Collateral – Stan Smith Loans http://stansmithloans.com/ 32 32 MSMEs in Coimbatore call for an increase in the upper limit of unsecured automatic loans https://stansmithloans.com/msmes-in-coimbatore-call-for-an-increase-in-the-upper-limit-of-unsecured-automatic-loans/ Wed, 11 May 2022 06:26:00 +0000 https://stansmithloans.com/msmes-in-coimbatore-call-for-an-increase-in-the-upper-limit-of-unsecured-automatic-loans/ MSMEs in Coimbatore call for an increase in the upper limit of unsecured automatic loans Coimbatore, May 11 (KNN) The Coimbatore District (Codissia) Small Scale Industry Association has proposed to Union Finance Minister Nirmala Sitharaman to increase the upper limit of automatic unsecured loans for MSMEs. The association said the move will help units secure […]]]>

MSMEs in Coimbatore call for an increase in the upper limit of unsecured automatic loans

Coimbatore, May 11 (KNN) The Coimbatore District (Codissia) Small Scale Industry Association has proposed to Union Finance Minister Nirmala Sitharaman to increase the upper limit of automatic unsecured loans for MSMEs.

The association said the move will help units secure funding for operational liabilities and restart businesses.

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Presenting the demands of MSMEs, Codissia, President MV Ramesh Babu urged the government to set up a separate committee to study and define parameters for MSMEs so that they have easy access to funds.

Highlighting the credit challenges faced by MSMEs, he said credit institutions insisted on high credit ratings and security guarantees, which many small borrowers did not have.

MSMEs are caught up in complex eligibility factors and paperwork as they are unfamiliar with digital lending channels, delaying access to finance and liquidity, he added.

Codissia also called for setting the money margin for micro and small businesses at 10% and announcing a waiver of loan processing fees. (KNN Office)

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Cardano NFTs as collateral for loans – The Cryptonomist https://stansmithloans.com/cardano-nfts-as-collateral-for-loans-the-cryptonomist/ Tue, 10 May 2022 21:12:28 +0000 https://stansmithloans.com/cardano-nfts-as-collateral-for-loans-the-cryptonomist/ In this article, we interview matteo cappola from FluidTokens, a project on gimbal work to unlock the use of NFT as collateral for loans in a decentralized and peer-to-peer way. In other words, users can take out loans by placing their valuable NFTs in a smart contract and pay interest to the lender, if he […]]]>

In this article, we interview matteo cappola from FluidTokens, a project on gimbal work to unlock the use of NFT as collateral for loans in a decentralized and peer-to-peer way.

In other words, users can take out loans by placing their valuable NFTs in a smart contract and pay interest to the lender, if he does not repay the loan, the lender will receive the NFT pledged.

Cardano NFT as collateral for loans

FluidTokens allows Cardano NFTs to be used as collateral for loans

Hello Matteo, thank you for your time. Please introduce yourself and the team behind FluidTokens.

Hello everyone! I am Matteo and I am the FluidTokens CEO. I worked on several large projects in the gimbal ecosystem like CNFT.io and Pavia.iomainly like technical manager and DevOps engineer. I am also a Cardano Smart Contract developer and a big supporter of blockchain disruptive technology.

The rest of the team is also made up of brilliant, seasoned Cardano developers with a strong ethics and good reputation within the community. FluidTokens also has celebrity ambassadors who focus their content on education to help everyone in this new crypto experience.

What is FluidTokens, what problems does it solve, and what are the risks of using an NFT as collateral?

FluidTokens is the Cardano peer-to-peer lending platform where anyone can borrow crypto tokens using NFTs as collateral for the loan. Everyone is also able to view all existing loans and accept the best lenders for the amount required.

NFTs often store enormous value but they are highly illiquid. The platform makes NFTs more efficient and a new part of the DeFi world, allowing owners to obtain additional liquidity for any financial strategy. Besides the typical DeFi risks, the lender agrees to provide crypto trusting the borrower who will have to repay the debt with the agreed interest. If the borrower does not repay on time, the lender may claim the NFT used as collateral.

For the lender it is very important to assess the risk of the loan and to verify that the NFT is legitimate: the platform will offer several features to guide the user. An additional risk is that the NFT value may drop suddenly due to external factors.it is therefore important to accept loans with reasonable expiry dates.

Why did you choose the Cardano blockchain for your project? What advantages does it have over competitors?

We have been developing on Cardano for more than 2 years and we know very well the advantages and disadvantages of this blockchain. the The eUTXO model and the use of Haskell in Smart Contracts allow an additional layer of security this is very important for DeFi protocols such as FluidTokens.

the Cardano Scaling Updates planned for this year will also fully unlock the beauty of this blockchain. For NFTs, there is an additional advantage: in Cardano, NFTs are not variables contained in a smart contract: they are actual tokens that live in your wallet. and they are not dependent on any particular smart contract.

Can you develop your partnership with COTI? And for those who don’t know, can you explain what COTI is and how it relates to Cardano?

We recently has partnered with COTI to support Djed, their next stablecoin. Loans will be easier to manage for many professional DeFi players when created and accepted using crypto assets whose value does not fluctuate too much during the loan.

COTI is the first enterprise-level fintech platform which allows organizations to create their own payment solution and digitize any currency to save time and money. We are planning additional DeFi mechanisms with COTI which will take advantage of upcoming FluidTokens features.

Where do you envision FluidTokens in a few years? What would success look like to you?

We believe that many NFTs will retain their high values ​​due to several factors such as community support, interesting utilities and the metaverseour platform will therefore be the main lending protocol to optimize the portfolios of NFT holders.

I will personally consider FluidTokens a success when all long-term planned features will be fully implemented, when the DAO will direct the updates to the platform and when many other DeFi components will leverage FluidTokens to compose incredibly optimized financial strategies. Metaverse integration is also an important step that we are currently investigating to improve the functionality of NFTs in virtual worlds.

Great, any last words? Where can our readers find you?

We are thrilled to be the pioneers of this new financial paradigm, giving extra strong utility to everything NFT on Cardano. Feedback from the community has already been overwhelmingly positive.

To follow our latest news and features please see our Twitter and feel free to join our very active community on Discord. We are planning token drops for members based on real knowledge of the platform!

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In a first, Goldman Sachs takes Bitcoin as collateral https://stansmithloans.com/in-a-first-goldman-sachs-takes-bitcoin-as-collateral/ Fri, 06 May 2022 12:42:14 +0000 https://stansmithloans.com/in-a-first-goldman-sachs-takes-bitcoin-as-collateral/ This week’s top 5 stories curated to catch up with the crypto world. Starting today, we are launching Cryptogram, an India-focused weekly newsletter on blockchain technology, global crypto markets, and Web 3.0 technologies that promise to change our future. If you wish to subscribe to this newsletter, click here. In this article, we’ve put together […]]]>

This week’s top 5 stories curated to catch up with the crypto world.

Starting today, we are launching Cryptogram, an India-focused weekly newsletter on blockchain technology, global crypto markets, and Web 3.0 technologies that promise to change our future. If you wish to subscribe to this newsletter, click here.

In this article, we’ve put together a list of the top 5 crypto stories of this week that will help you stay in tune with the crypto ecosystem.


Algorand scores a goal

Algorand, a proof-of-stake (PoS) blockchain protocol, has entered into an agreement with world football governing body FIFA as an official blockchain partner. Under the agreement, Algorand will be a regional supporter for North America and an official sponsor of the Women’s World Cup in Australia and New Zealand next year. FIFA will receive assistance from Algorand to develop its virtual asset strategy and Algorand will have the opportunity for promotions and media exposure through FIFA. ALGO, the token that powers Algorand, surged more than 20% after news broke of the partnership.


Binance invests in Twitter

Global crypto exchange Binance participated in the $44 billion acquisition of Twitter led by Musk according to the United States Securities and Exchanges Commission. Binance is one of 18 co-investors in the acquisition alongside major crypto industry players like Sequoia Capital Fund and Fidelity Management and Research Company. Interestingly, Elon Musk had a little argument on Twitter with the CEO of Binance regarding some of the issues faced by investors in the exchange. Given Twitter’s popularity among crypto enthusiasts, Binance is looking to capitalize on Musk’s move through this acquisition.


Goldman Sachs seizes digital gold

Goldman Sachs, an investment firm with over $2.5 trillion in assets under management (AUM), issued a Bitcoin-backed loan to US-based crypto exchange Coinbase bridging the gap between traditional finance (TradFi) and decentralized finance (DeFi). The loan was secured by a portion of Coinbase’s total holdings of 4,487 Bitcoins. The loan requires Coinbase to top up its Bitcoin collateral if prices fall too low. While Bitcoin-backed loans are common in DeFi protocols, Goldman’s offer shows the willingness of TradFi institutions to test new technologies.


Argentinian banks offer BTC

Argentina’s largest private bank, Banco Galicia, has decided to offer its clients different types of crypto assets such as Bitcoin, Ethereum, USD Coin and XRP. According to the bank, “Banco Galicia is launching an innovative new service for its customers, offering the purchase, sale and custody of cryptocurrencies in a simple, secure and unique place”. One of the main reasons crypto is popular in Argentina is that the country has one of the highest inflation rates (50% YoY) in the world.


Gucci accepts Bitcoin

Gucci, a high-end Italian fashion brand, has announced its decision to accept crypto-asset payments by the end of May for US customers, with plans to expand to all of its stores in North America. Gucci would accept 12 crypto assets, including Bitcoin, Bitcoin Cash, Ethereum, Wrapped Bitcoin, Litecoin, Shiba Inu, Dogecoin and five US dollar stablecoins. Customers paying with crypto in-store at select pilot locations will receive an email with a QR code to pay through their digital asset wallet.

Use promo code TNM51 at www.giottus.com/profile#promo after registration to get Rs.51 worth of Bitcoin free

Warning: This article was written by Giottos Crypto Exchange in a paid partnership with The News Minute. Investments in crypto-assets or cryptocurrency are subject to market risks such as volatility and have no guaranteed return. Please do your own research before investing and seek independent legal/financial advice if you are unsure about investments.

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Dad gave £36,000 Volvo lease to loan sharks as collateral and they shipped it to Poland https://stansmithloans.com/dad-gave-36000-volvo-lease-to-loan-sharks-as-collateral-and-they-shipped-it-to-poland/ Thu, 05 May 2022 13:04:34 +0000 https://stansmithloans.com/dad-gave-36000-volvo-lease-to-loan-sharks-as-collateral-and-they-shipped-it-to-poland/ A man who leased a £36,000 Volvo car gave it to illegal moneylenders as collateral for a loan he took out, a court has heard. The Volvo is now missing, but is believed to have been shipped to Poland by the loan sharks or their associates. To try to cover his tracks, Adrian Maciejewski first […]]]>

A man who leased a £36,000 Volvo car gave it to illegal moneylenders as collateral for a loan he took out, a court has heard. The Volvo is now missing, but is believed to have been shipped to Poland by the loan sharks or their associates.

To try to cover his tracks, Adrian Maciejewski first told the garage he was renting the vehicle from that he couldn’t return it because his brother had it and his brother was self-isolating with Covid. Swansea Crown Court heard the car scam wasn’t the only way Maciejewski turned to crime to make money – the father-of-one once harassed a celebrity and scammed him demanded money, threatening to kill himself if he wasn’t. paid.

Read more: A driver led police on a 20-mile high-speed chase

Megan Jones, prosecuting, said in November 2019 that Maciejewski took out a 12-month lease on a £36,000 Volvo vehicle from Quality Vehicle Hire at Cwmbwrla in Swansea. The defendant made the regular monthly payments of £576, but when the garage boss contacted him in November 2021 to arrange for the return of the Volvo, the defendant told him he had lent it to his brother who was now isolated. The court heard the boss of the garage – who knows Maciejewski from the car trade – give the defendant a week’s grace period, but when he contacted him again he was told that Maciejewski’s brother had driven the Volvo in Poland to see their parents. The prosecutor said the garage boss gave the defendant a week to return the missing Volvo and said otherwise he would have to report it stolen. When Maciejewski showed up at Quality Vehicle Hire to return another leased vehicle on Nov. 17, he said the Volvo was in Poland, but he didn’t know who had it or where it was. Discover the trusted treasurer of a popular yacht club who raided the coffers and used tens of thousands of pounds of his money.

Police were contacted and in his interview the accused said that in the summer of 2019 he found himself in debt of between £60,000 and £70,000 and in desperation posted messages on social media asking if anyone could lend him some money. He said he was approached by people offering to loan him £10,000 which he would have to repay £1,000 a month for 20 months and when he found himself struggling to make the repayments, he gave the Volvo as security to the lenders. Maciejewski said he was warned by the lenders that if he spoke to the police about the arrangements there would be “problems”, then in October 2020 when he contacted them to say he needed to recover the vehicle because he should return it soon, it was said that it was in Poland. Learn about a successful recruitment consultant who lost his business and his home in the Covid pandemic and turned to cocaine trafficking to make ends meet and support these young children.

Maciejewski, of Waun Gron, Rhydyfro, Pontardawe, admitted the theft. He has three previous convictions for five offenses, including harassment. The offence, for which he received a community order in 2018, saw him write letters to an anonymous ‘TV personality’ asking for money, threatening to kill himself and showing up at the property of the celebrity.

Giles Hayes, for Maciejewski, said the defendant had had a business relationship with the garage boss for several years and had previously rented vehicles from him without incident. He said his client’s “financial desperation” led him to make a “rash and very stupid decision” and that he felt remorse for his actions. The attorney said Maciejewski was a hard-working man trying to pay off his debts and he said an immediate custody stint would impact his wife and teenage daughter. The lawyer also pointed to the delay in the case, his client having made a full confession during a police interview in December 2020 but not being charged by postal requisition until March 2022.

Judge Huw Rees told Maciejewski that as someone who had worked in the motor trade for many years, he would have known the financial impact on his victim of what he was doing. He noted the defendant’s previous conviction for harassment and told him: “You are capable of being creative in your dishonesty”.

The judge called the delay in the case ‘unacceptable’ and said there had been no recurrence since his arrest and that the defendant had worked hard to restore some stability in the finances of the family who would be at risk if he were taken directly into custody. With a one-third reduction for his guilty plea, Maciejewski received an eight-month prison sentence suspended for 18 months and ordered to perform 200 hours of unpaid work. The judge said that given the defendant’s financial situation, he would not award any compensation to the victim. Judge Rees told Maciejewski: “I’m giving you an opportunity for the good of others – if you abuse it, the blame will be on you and I’ll send you to jail.”

You can sign up for our regular Crime & Punishment newsletter here while this interactive tool allows you to view the latest crime statistics in your area:

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Vccircle | Subscription https://stansmithloans.com/vccircle-subscription/ Wed, 04 May 2022 11:14:47 +0000 https://stansmithloans.com/vccircle-subscription/ 1 year Billed annually at 4699 ₹ 392 / month 2 years Billed annually at 6999 ₹ 292 / month 3 years Billed annually at 9399 ₹ 261 / month 1 year Billed annually at 6999 ₹ 583 / month 2 years Billed annually at 8799 ₹ 367 / month 3 years Billed annually at […]]]>

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ASK THE WOMAN FOR MONEY: Collateral Charge is an alternative to Reverse Mortgage to leverage home equity as credit https://stansmithloans.com/ask-the-woman-for-money-collateral-charge-is-an-alternative-to-reverse-mortgage-to-leverage-home-equity-as-credit/ Sun, 01 May 2022 02:00:29 +0000 https://stansmithloans.com/ask-the-woman-for-money-collateral-charge-is-an-alternative-to-reverse-mortgage-to-leverage-home-equity-as-credit/ Dear Money Lady Readers: I want to offer you an alternative to a reverse mortgage product. I was overwhelmed with readers’ response to the previous column I wrote on reverse mortgages. It seems that many Canadians are looking to this product as a way to inject much-needed funds into their later retirement years. Many of […]]]>

Dear Money Lady Readers: I want to offer you an alternative to a reverse mortgage product.

I was overwhelmed with readers’ response to the previous column I wrote on reverse mortgages.

It seems that many Canadians are looking to this product as a way to inject much-needed funds into their later retirement years.

Many of you had questions about other alternatives, so I wanted to suggest one that I think would indeed be a better option: an accessory filler.

The problem with a reverse mortgage is that you will often receive some of the equity in your home as a lump sum to use as you wish, without needing repayment until you sell your home or die. Many people view the lump sum as a lottery win and because they haven’t been good with the money in the past, they often use it up faster than they expected.

Remember that with a reverse mortgage, no payments are made to reduce the principal debt or, at the very least, to keep the interest charges under control. So the debt grows quickly, especially with the help of a much higher interest rate than is normal for a Canadian mortgage at your bank.

A collateral charge is a financial planning tool secured against your principal residence at 100% of its current value. It has no term or renewal and is fully open, extremely flexible and, for the right client, complete freedom. It gives you access to much more equity than a reverse mortgage, the rate is much lower and everything is fully transparent – meaning you now see what you owe, what the monthly commitment is and, at Because of this, most people become very conscious of their current financial situation.


Instead of giving up partial title to get a reverse mortgage, you access the equity in your home through your collateral charge. Your warranty fees never change or expire. You can hold it for many years with a zero balance, but when you need it, you can easily withdraw the funds at that time.


Personally, I believe this product should be considered by all Canadians who own a home, whether working or retired. The reason is twofold. If you have a mortgage, line of credit, or consumer debt, putting it into a collateral charge structure will immediately accelerate and pay off your debt faster, simply because interest is calculated differently than any other loan format. It is a true pay-for-what-you-owe product, calculating interest on the outstanding balance each month.

The other reason to consider this product is that it has no duration or renewal – so if you were to get it today, you could keep it for the next 20-30 years and never have it again. to qualify.

Hence why we recommend it for estate planning. When you’re retired, you usually have a much lower income, and if you need access to cash for an unexpected event, you have it now.

So instead of giving up partial title to get a reverse mortgage, you access the equity in your home through your collateral charge. Your warranty fees never change or expire. You can hold it for many years with a zero balance, but when you need it, you can easily withdraw the funds at that time.

In retirement, you still want to have access to much-needed credit and you never want to be put in a compromising position.

When planning for the future, it is sometimes a good idea to organize things well so that you have options and freedoms that ensure your comfort, dignity and security as you age.

Good luck and best wishes,

ATML – Christine Ibbotson


(Written by Christine Ibbotson, national radio host and author of three books on finance and the Canadian bestseller How to Retire Debt Free & Wealthy. Visit www.askthemoneylady.ca or send a question to [email protected])

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Why I use Bitcoin as collateral to get into debt https://stansmithloans.com/why-i-use-bitcoin-as-collateral-to-get-into-debt/ Thu, 28 Apr 2022 10:30:00 +0000 https://stansmithloans.com/why-i-use-bitcoin-as-collateral-to-get-into-debt/ Bitcoin (BTC 2.13%) is one of the most flexible types of assets you can own. At first glance, it is not immediately obvious why this is the case. To the uninitiated, Bitcoin looks like numbers on a screen. However, in recent years, an enormous amount of infrastructure has been built around Bitcoin to enable it […]]]>

Bitcoin (BTC 2.13%) is one of the most flexible types of assets you can own. At first glance, it is not immediately obvious why this is the case. To the uninitiated, Bitcoin looks like numbers on a screen. However, in recent years, an enormous amount of infrastructure has been built around Bitcoin to enable it to be useful in various new ways. One of these ways is to provide collateral to get into debt.

Bitcoin can be used as collateral to incur debt

How Bitcoin Works as Collateral

Bitcoin can function as collateral on cryptocurrency exchanges and decentralized finance (DeFi) applications. In either case, a user can take out a loan against their Bitcoin. These loans use overcollateralization, which means the borrower must provide Bitcoin that is worth more than the amount they are borrowing. If someone puts up $10,000 worth of Bitcoin, a typical application will allow them to borrow at least $5,000 worth of stablecoins such as USDT (USDT -0.07%). Debt typically accumulates daily and can be repaid at any time without penalty. Bitcoin is locked until you repay the principal amount, in which case you can withdraw it.

Oversecured debt agreements are not without risk. If the value of Bitcoin falls too low, the lending platform will issue a margin call. This is a notification informing the borrower that the value of his collateral is too low and risks being liquidated. There are two thresholds here: the margin call level and the liquidation level. Each platform sets these thresholds for itself, but they are usually set as 80% and 85% of the collateral value, respectively.

So if a borrower uses $10,000 of Bitcoin to borrow $5,000 of stablecoins, and the value of Bitcoin drops to $6,000, the borrower receives a margin call. If the collateral drops to $5,750, the platform liquidates some or all of the Bitcoin to pay off the debt. In the worst case scenario, a borrower will lose all their Bitcoins following a liquidation. However, they could keep the original stablecoins they borrowed in the first place.

Given the risk of being liquidated and the volatility of Bitcoin, it is crucial that I carefully manage my loan-to-value ratio – the ratio between the amount I borrow and the amount of collateral I have provided. Since Bitcoin can and has dropped 35% in the short time before, it’s ideal if I keep my loan-to-value ratio below 50%.

How I use bitcoin as collateral

There are three reasons I might consider collateralizing my Bitcoin. The first is to pay less tax. I prefer not to sell my Bitcoin. As soon as I do that, I would generate a taxable event that would eventually increase my tax bill at the end of the year. So if I need access to cash, the most tax-efficient way to do things is to borrow against my Bitcoin.

I could also use Bitcoin to take out a loan to pay an expense. If I need money, the guarantee provides me with an attractive alternative. USDT can be converted into US or Canadian dollars using an exchange, and I can then use that money to pay for expenses.

I can also take out a loan to generate a return. Instead of spending the USDT stablecoin, I can deposit it into a yield farm on a DeFi platform. At this point I have turned my debt into a passive income stream. As long as the return on the yield farm is greater than the interest I’m paying on the loan, it’s a profitable arrangement.

Bitcoin is flexible

Some people tell me that Bitcoin is useless except for buying low and selling high. But Bitcoin can be guaranteed to go into debt for various reasons. To me, this proves that Bitcoin has a role to play in the future of our financial systems. Bitcoin is a sophisticated bearer instrument like gold, not just an obscure digital currency. I see financial institutions clinging to cases like this to grow and expand their service offerings. Such a flexible asset has its place in the global economy.

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Phase-out of Pandemic Coverage Relaxation Measures https://stansmithloans.com/phase-out-of-pandemic-coverage-relaxation-measures/ Thu, 28 Apr 2022 08:01:01 +0000 https://stansmithloans.com/phase-out-of-pandemic-coverage-relaxation-measures/ Prepared by Charlotte Bakker, Luca Bortolussi, Mark Büssing-Lörcks, Adina-Elena Fudulache, Diana Gomes, Iskra Pavlova and Stephan Sauer[1] Published as part of the ECB Economic Bulletin, issue 3/2022. Collateral easing measures have played a key role in the ECB’s monetary policy response to the coronavirus (COVID-19) pandemic, facilitating access to Eurosystem credit operations. The temporary guarantee […]]]>

Prepared by Charlotte Bakker, Luca Bortolussi, Mark Büssing-Lörcks, Adina-Elena Fudulache, Diana Gomes, Iskra Pavlova and Stephan Sauer[1]

Published as part of the ECB Economic Bulletin, issue 3/2022.

Collateral easing measures have played a key role in the ECB’s monetary policy response to the coronavirus (COVID-19) pandemic, facilitating access to Eurosystem credit operations. The temporary guarantee measures (summarized in Chart A) were introduced in April 2020 to ensure that the banking sector can expand its access to central bank liquidity on favorable terms through the liquidity-providing credit operations of the Eurosystem (mainly targeted longer-term refinancing operations or TLTRO III), enabling it to continue to cover the financing needs of the euro area economy.[2] More specifically, these measures have been introduced to serve the following three main interrelated objectives.

  • Anticipate shortages of eligible guarantees: all measures have been introduced as a preventive measure to avoid shortages of eligible collateral in the event of increased demand for liquidity. This has facilitated banks’ access to ample central bank liquidity on favorable terms, contributing to the mass adoption of TLTRO III, thereby transmitting the smooth stimulus to the wider economy.
  • Added flexibility to the warranty framework: some of these measures have provided national central banks (NCBs) with additional flexibility to meet the collateral needs of national banks, for example by allowing lending with state/public sector guarantees under COVID-19 schemes. 19 which were not fully compliant with the requirements of the general guarantee guarantee framework to be mobilized under the national supplementary credit claims (ACC) frameworks.
  • Countering unwanted procyclical feedback effects: Falling asset prices and potential rating downgrades may have increased pressure on the availability of collateral, potentially creating uncertainty about individual banks’ access to central bank liquidity. In order to avoid pro-cyclical feedback loops and ultimately preserve and restore lending conditions favorable to the real economy, a number of measures have therefore been introduced. These included maintaining the eligibility of certain marketable assets which met the minimum credit quality requirements on 7 April 2020 but whose credit ratings subsequently deteriorated below the minimum rating threshold (the “credit freeze”). ‘eligibility’) and the temporary reduction of valuation haircuts.

Figure A

Coverage relaxation measures in response to the COVID-19 pandemic

Source: Box 1 entitled “TLTRO III and collateral easing measures” of the article entitled “TLTRO III and bank lending conditions”, Economic bulletinissue 6, ECB, September 2021.
Notes: “ACC” refers to Additional Credit Claims, “ABS” refers to Asset Backed Securities and “CQS” refers to Credit Quality Step, as defined in the Credit Assessment Framework of the Eurosystem. In addition to the measures described in Figure A, it should be noted that some NCBs created new ACC frameworks or expanded their existing ACC frameworks with functionality that was already acceptable before the pandemic.

The ECB’s collateral easing measures have largely contributed to increasing the volume of eligible collateral. Overall, ECB staff estimates indicate that the total value of collateral attributable to the easing measures amounted to around €285 billion (around 10%) of the total €2,794 billion in guarantees mobilized at the end of February 2022. This means that they contributed around 23% of the total increase in collateral positions of 1,236 billion euros (Chart A). The contribution from the collateral easing measures was mainly due to the temporary haircut reduction and the extensions of the NCBs’ ACC arrangements, which together accounted for more than 90% of the total effect.

Table A

Mobilization of collateral and recourse to Eurosystem credit operations

(in billions of euros)

Sources: ECB and ECB calculations.
Notes: The bar chart shows the mobilization of Eurosystem-eligible collateral by asset class and the values ​​are after valuation and haircuts. The first observation shows the composition of collateral before the outbreak of the pandemic, February 27, 2020. The shaded areas in the right bars indicate the total value of collateral due to collateral easing measures for the respective asset class on February 24, 2022.

Dismantling in three steps

On March 24, 2022, the Board of Governors announced its decision to phase out the pandemic safeguards relaxation measures.[3] This decision reflects the expected decline over time in banks’ demand for liquidity as TLTRO III operations gradually mature. The ECB also assessed the effectiveness of the various measures from a financial risk perspective, expressed in terms of the temporary expansion of collateral relative to the evolution of the Eurosystem’s risk protection. In particular, the temporary haircut shows a higher ratio of financial risk per unit of exposure than other collateral easing measures. The assessment further examined to what extent the specific initial policy motivation was still relevant, for example in allowing banks to mobilize collateral faster through reduced reporting requirements.

The phasing out is planned in three stages and gives banks time to adapt to adjustments to the collateral framework.

As a first step, from 8 July 2022, the ECB will halve the temporary reduction in collateral valuation haircuts on all assets, from the current adjustment of 20% to 10%. This allows for a gradual restoration of pre-pandemic risk tolerance levels and reduces the Eurosystem’s financial risks associated with the haircut reduction. The haircut represents approximately 40% of the total value of the collateral generated by the collateral relaxation measures. The partial reversal provides adequate time for banks to adjust their collateral mobilization. The ECB will also phase out a set of measures whose impact and scope are more limited: i) the ECB will no longer maintain the freezing of the eligibility of downgraded marketable assets; ii) the ECB will restore the limit of unsecured debt securities issued by any other banking group in a credit institution’s collateral pool from 10% to 2.5%; iii) The ECB will phase out the temporary relaxation of several technical requirements for ACC eligibility, mainly with regard to the full restoration of the frequency of reporting requirements at the level of ACC loans for pools, as well as reporting requirements. acceptance of banks’ own credit assessments by internal rating systems.

As a second step, in June 2023, the ECB plans to implement a new scale of valuation haircuts based on its pre-pandemic risk tolerance level for credit transactions, completely removing the temporary reduction in valuation haircuts. valuation of guarantees. Details of the new haircut schedule will be announced in due course and will be based on the results of the next regular review of the ECB’s risk control framework.[4]

In the third stage, in March 2024, the ECB will, in principle, remove the remaining pandemic safeguards relaxation measures. The Governing Council will take the final decision following a comprehensive review of the ACC frameworks, taking into account the collateral needs of banks to continue participating in Eurosystem credit operations, including transactions TLTRO III until December 2024. Measures in place until March 2024 include acceptance of various ACCs put in place during the pandemic, including loans guaranteed by the State and certain public sector entities. These have significantly contributed to the availability of guarantees since the start of the pandemic. Specifically, secured loans mobilized represent approximately 40% of the total value of collateral generated by collateral easing measures. NCBs may nevertheless decide to terminate all or part of their ACC frameworks earlier, for example if their use is limited.

The minimum credit quality exemption for Greek government bonds must be maintained

The Governing Council has decided to continue to allow NCBs to accept Greek government bonds (GGBs) that do not meet the minimum Eurosystem credit quality requirements, but meet all other eligibility criteria for applicable securities. This applies at least as long as reinvestments in GGBs under the Pandemic Emergency Purchase Program (PEPP) continue. The Board of Governors introduced this waiver for the use of GGBs as collateral on 7 April 2020, on a temporary basis and subject to a specific haircut schedule, following the inclusion of GGBs in the PEPP, which was agreed on March 18, 2020. The extension of the measure is based on multiple additional considerations, including the need to continue to prevent fragmentation of access to Eurosystem monetary policy operations, which would impair the proper functioning of the transmission of the policy to the Greek economy as it is still recovering from the pandemic. Other considerations include that Greece remains subject to regular post-programme reviews of its economic and financial situation and benefits from disbursements under the Recovery and Resilience Facility, subject to the successful implementation of its reform program.

The Eurosystem’s monetary policy framework grants the Governing Council the discretionary power to deviate from the assessments of credit rating agencies (CRAs) if justified, thus avoiding a mechanical dependence on their ratings. The discretion to avoid the mechanistic use of ratings from credit rating agencies is set out in Article 159 of the ECB’s general documentation for the implementation of monetary policy.[5] It is consistent with Principle III.1 of the Financial Stability Board Principles for Reducing Reliance on Rating Agency Ratings.[6] Previous examples of the application of this discretion include waivers of minimum credit quality requirements for several countries during the eurozone sovereign debt crisis. Another example is the eligibility freeze adopted on April 22, 2020 and phased out from July 8, 2022, as described above.

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MONEY: Why not consider a collateral charge on your home? https://stansmithloans.com/money-why-not-consider-a-collateral-charge-on-your-home/ Tue, 26 Apr 2022 14:22:30 +0000 https://stansmithloans.com/money-why-not-consider-a-collateral-charge-on-your-home/ Content of the article I was overwhelmed with reader response to my reverse mortgage column. It would seem that many Canadians are looking to this product as a way to inject much-needed funds into their later retirement years. Content of the article Many had questions about other alternatives, so I wanted to offer you one […]]]>

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I was overwhelmed with reader response to my reverse mortgage column. It would seem that many Canadians are looking to this product as a way to inject much-needed funds into their later retirement years.

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Many had questions about other alternatives, so I wanted to offer you one that I think would indeed be a better option: an accessory filler.

The problem with a reverse mortgage is that you will often receive some of the equity in your home as a lump sum to use as you wish, without needing repayment until you sell your home or die.

Many people view the lump sum as a lottery win and, because they haven’t been good with the money in the past, often burn it faster than they expected.

Remember that with a reverse mortgage, no payments are made to reduce the principal debt or, at the very least, to keep the interest charges under control. So the debt grows quickly, especially with the help of a much higher interest rate than is normal for a Canadian mortgage at your bank.

But a collateral charge is a financial planning tool guaranteed against your principal residence at 100% of its current value. It has no term or renewal and is fully open, extremely flexible and for the right client – offers complete freedom.

It gives you access to much more equity than a reverse mortgage, the rate is much lower and everything is fully transparent – ​​meaning you now see what you owe and what the monthly commitment is. And because of this, most people become very aware of their current financial situation.

Personally, I believe this product should be considered by all Canadians who own a home, whether working or retired.

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The reason is twofold. If you have a mortgage, line of credit, or consumer debt, putting it into a collateral charge structure will immediately accelerate and pay off your debt faster, simply because interest is calculated differently than any other loan format. It is a “true pay-for-what-you-ow” product, calculating interest on the outstanding balance each month.

The other reason to consider this product is that it has no term or renewal. So if you were to get it today, you could keep it for the next 20-309 years and never have to qualify again.

Hence why we recommend it for estate planning.

When you are retired, you usually have a much lower income and if you need access to cash for any unexpected event, you have it now. So instead of giving up partial title to get a reverse mortgage, you access the equity in your home through your collateral charge. Your warranty fees never change or expire. You can keep it for many years with a zero balance, but when you need it, you can easily withdraw the funds at that time. When you retire, you still want access to much-needed credit and you never want to be put in a compromising position.

When planning for the future, it is sometimes a good idea to organize things well so that you have options and freedoms that ensure your comfort, dignity and security as you age.

Written by Christine Ibbotson, national radio host and author of three books on finance as well as the Canadian bestseller, How to Retire Debt Free & Wealthy. For more information, visit www.askthemoneylady.ca or send a question to info@askthemoneylady.ca.

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CryptoPunks used as collateral for $8.3 million. Ready – ARTnews.com https://stansmithloans.com/cryptopunks-used-as-collateral-for-8-3-million-ready-artnews-com/ Wed, 20 Apr 2022 20:57:00 +0000 https://stansmithloans.com/cryptopunks-used-as-collateral-for-8-3-million-ready-artnews-com/ At an evening sale in February organized by Sotheby’s, the auction house was shocked when a representative of the house announced that the only lot of the night had been drawn. It turns out that the lot of 104 “CryptoPunks”, highly prized NFTs that often sell for millions, had instead been used to secure an […]]]>

At an evening sale in February organized by Sotheby’s, the auction house was shocked when a representative of the house announced that the only lot of the night had been drawn.

It turns out that the lot of 104 “CryptoPunks”, highly prized NFTs that often sell for millions, had instead been used to secure an $8.3 million loan by the owner of the lot, an anonymous character who goes by 0x650d on Twitter.

The loan was made possible by NFTfi, an NFT-backed lending marketplace, and MetaStreet, an NFT liquidity scaling startup. “We contacted 0x650d shortly after learning that they were pulling out of the Sotheby’s sale,” said Conor Moore, co-founder of MetaStreet.

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“He didn’t even know this market really existed until we started talking,” said David Choi, another MetaStreet co-founder who has a background in art history and traditional art funding. “I think the upside potential of the loan quickly became more apparent. He was really quite happy to take that avenue rather than the sale, given the tax implications and things like that.

Although 0x650d is not the first to receive a large loan using NFTs as collateral, it is certainly the largest known loan of its kind. And the NFT loan market only seems to be getting hotter.

According to NFTfi, the company recently surpassed $100 million in lending volume since its launch in June 2020, including $70 million generated in 2022 alone, as of April 14.

However, it is still an emerging market. The art lending business is currently valued at approximately $25 billion. Joe Charalambous, of art finance company TPC Art Finance, which provides traditional art-secured loans and has considered entering the NFT finance space, said demand for loans has exploded.

“We have seen a large increase in requests and overall demand for art funding since the start of the Covid lockdowns which have continued until now,” Charalambous said. “We have also received requests for loans against what I assume are considered blue chip NFTs, CryptoPunks and things like that. But we would like to see more stability before entering this market.

Charalambous explained that at TPC Art Finance, the firm looks closely at the price history of a given work or that of an artist on the secondary market. The older the work, the more information there is about how a work might perform in the market, although the company considers works that have only been on the market for a year.

The information collected aims to answer a key question: “If we were to sell the collateral in a default situation, what do we think we would get at an auction on a typical day?” said Charalambous. However, he concedes that judging the value of a work is often very subjective.

Choi and Moore of MetaStreet look at loans from a strictly quantitative perspective. “It’s less about provenance and more about data science,” Choi said.

Moore added, “There is this joke that three months in crypto equals one year in traditional markets. With CryptoPunks, there are typically 10-15 trades per day and around $15-20 million in volume traded per week, and everything is traceable.

This means that there is indeed a lot of data to sift through. “We are able to track the volatility and liquidity of different NFTs, which informs what would be considered solvent. You can get a good idea of ​​real-time pricing,” Moore said.

But even with all of this data, NFT markets, and cryptocurrency value in general, are a notoriously volatile market.

“The term of this $8 million loan is 90 days,” TPC Art Finance’s Charalambous said of the 0x650d deal. “I think that says a lot. Investors might be comfortable with the short-term valuation of NFTs, but take a more conservative view of the market in general.

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