Falling values of collateral

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Problem:

Describe, with examples, how collateral is used to reduce loss given default and hence the risks to a bank of providing a loan. What impact do falling values of collateral such as land and housing have on the volume of bank lending?

Additional Information:

This question is basically belongs to Finance as well as it discusses about how collaterals are employed in reducing loss given default for banks in providing loans with examples.

Reference no: EM13826545

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