Banks get their low collateral rate by the power of regulation. How does a priva... | Hacker News

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		petra on Nov 13, 2020 \| parent \| context \| favorite \| on: Xi Jinping personally halted Ant's IPO after Jack ... Banks get their low collateral rate by the power of regulation. How does a private company able to have only 2% collateral ?

Aperocky on Nov 13, 2020 [–]

It's effective collateral. When you can bundle the loans you just made and sell it to someone else, that's how you reduce your effective collateral.

There was no regulation on this before, leading to some very shady practices.

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