Collateral is any asset that has some value and can be used to secure a loan. You pledge the asset as security for the repayment of the loan.

Collateral is more than just a fairly good Tom Cruise movie. It’s also a Jamie Foxx movie… Actually, what we’re really talking about on our podcast this week is financial collateral. This kind of collateral has become more and more important since the financial crisis, because it reduces the risk to lenders that they’ll never get their money back.

Peter Balaz came on the podcast A Dictionary of Finance to talk about how the use of collateral—and the markets that have grown around it—have expanded since the crisis in 2009.

“Everyone became much more aware of collateral at that time,” says Peter, who works in the Treasury Department of the European Investment Bank. “The difference between secured and unsecured loans started to grow and it started to become less stable. Banks became more aware of the financial risks.”

As well as explaining bank collateral, Peter also explained a range of related financial terms. Check out the podcast to discover, among other things:

• what is the difference between secured and unsecured loans
• how does beneficial ownership work
• and what is a repo (apart from another movie, a very good one this time, starring Harry Dean Stanton and Emilio Estevez)

Subscribe to A Dictionary of Finance in the iTunes podcast app or on other podcast platforms like Stitcher. Allar and Matt would love to hear from you with suggestions for future podcast topics. Tweet them at @EIBMatt and @AllarTankler.