Patent ID: 7139730

Claim:
A method for providing centralized collateral management between a group of users, wherein each of the users has a portfolio of assets within a network of obligations, and wherein each of the users has a sub-portfolio of obligations with respect to each other, comprising the steps of: (1) determining a mark to market (MTM) by use of a computer value for each of the sub-portfolios; (2) providing MTM Collateral Credits by use of a computer up to the MTM gains on each of the sub-portfolios; (3) notifying the users of their respective total collateral obligations; (4) notifying the users of the value of their respective MTM Collateral Credits; (5) receiving any required collateral from each of the users; and (6) allocating said received collateral by use of a computer against the sub-portfolios of each of the users; whereby the total amount of collateral posted by each of the users is minimized by said MTM Collateral Credits and is used to protect against actual losses due to the potential inability of the collateral provider to fulfill its obligations.