Rehypothecation

 

Similar in context to Bail In Propositions, yet devoid of the latter construct’s legislative connotation, rehypothecation is a practice endemic to the market system whereby financial institutions or brokerage firms utilize the capital assets and/ or monetary holdings posted as collateral by their clientele for the express purpose of borrowing as a means to satisfy preexisting debt obligation.

LAYMAN’S SYNOPSIS - by Michael Reign - The practice of rehypothecation exists as a type of Bail In Proposition in the sense that the fundamental premise of its ratification rests in the confiscation of wealth by financial institutions as a means to effect the repayment of preexisting debt obligations. The primary difference between each of these practices rests in the fact that Bail In Propositions typically occur as a result of some form of government or administrative mandate.