pledging requirement


A legal requirement designed to secure collateral for certain types of deposits such as public funds deposited by a government entity in a commercial bank. Many banks meet this mandate by setting aside actively traded securities that are issued or insured by the U.S. government (e.g., treasury bills) in a separate account. These securities are pledged (reserved) to cover the value of the funds deposited by the state or local government in the event of a bank default.
Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
pledging pledgor