Meaning of “collateral deflation” in the English Dictionary

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"collateral deflation" in Business English

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collateral deflationnoun [ U ]

uk us also debt deflation FINANCE

a situation in which collateral becomes less valuable:

The most dangerous deflation is collateral deflation where the value of the collateral underlying the financial system plunges and destroys the net worth of the banking system.

(Definition of “collateral deflation” from the Cambridge Business English Dictionary © Cambridge University Press)