Not necessarily true. The loan (especially if you're borrowing 1% of the collateral value) could be non recourse [0]. In such a case the bank can only depend on

Not necessarily true. The loan (especially if you're borrowing 1% of the collateral value) could be non recourse [0]. In such a case the bank can only depend on the stock value for recovery. [0] https://www.investopedia.com/ask/answers/08/nonrecourse-loan-vs-recourse-loan.asp https://www.investopedia.com/ask/answers/08/nonrecourse-loan...