Standard Securities Lending Structure
If the counterparty is acting as an agent lender, a loan of securities is generally only released once eligible collateral to the same value (including margin) has been provided. A counterparty may release a loan which is under-collateralised if the exposure is within their agreed exposure threshold or if this is within their risk parameters. This is known as the hold and release approach. Daylight exposure generally only impacts the collateral provider as a result. (IBP-175)
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