``Discussions with collateral teams at large banks suggest that about $1 trillion of the market value of securities of the global hedge fund industry was rehypothecated, as of end-2007. Of the total pledgeable collateral of $10 trillion received by the large ten global banks that appears in their financials (via securities lending, repo and prime brokerage), about 40 percent came from hedge funds prior to the crisis; the rest of the collateral was largely posted by banks to each other to take advantage of their respective funding specialization.''

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