A banker's lien is a legal right that a bank has to hold onto any property or
assets that a customer has deposited with the bank until the customer has paid off their outstanding
debts. This lien can be used to secure any type of debt, including loans, credit card bills, and overdrafts.
In relation to
securitisation, a banker's lien can be used to protect the interests of investors in securitised products. For example, if a bank securitises a portfolio of loans and then sells the resulting securities to investors, the bank will typically retain a banker's lien on the underlying loans. This means that if the borrowers on the loans
default, the bank will be able to seize the assets that are pledged as security for the loans. This helps to protect the interests of the investors in the securitised products, as it ensures that they will be repaid if the borrowers default.