▁deb tor ▁( a ▁client ▁such ▁as ▁a ▁h edge ▁fund ) ▁to ▁back ▁the ▁bro ker ' s ▁own ▁tr ades ▁and ▁borrow ing . ▁This ▁mechanism ▁also ▁enables ▁le verage ▁in ▁the ▁se cur ities ▁market . ▁ ▁In ▁the ▁UK , ▁there ▁is ▁no ▁limit ▁on ▁the ▁amount ▁of ▁a ▁client ' s ▁assets ▁that ▁can ▁be ▁re h yp othe c ated , ▁except ▁if ▁the ▁client ▁has ▁negoti ated ▁an ▁agreement ▁with ▁their ▁bro ker ▁that ▁includes ▁a ▁limit ▁or ▁prohib ition . ▁In ▁the ▁US , ▁re - h yp othe cation ▁is ▁c apped ▁at ▁ 1 4 0 % ▁of ▁a ▁client ' s ▁deb it ▁balance . ▁ ▁In ▁ 2 0 0 7 , ▁re h yp othe cation ▁account ed ▁for ▁half ▁the ▁activity ▁in ▁the ▁shadow ▁bank ing ▁system . ▁Because ▁the ▁coll ater al ▁is ▁not ▁c ash ▁it ▁does ▁not ▁show ▁up ▁on ▁conventional ▁balance ▁sheet ▁account ing . ▁ ▁Before ▁the ▁Le h man ▁collapse , ▁the ▁International ▁Mon et ary ▁Fund ▁( IM F ) ▁calculated ▁that ▁US ▁banks ▁were ▁receiving ▁over ▁$ 4 ▁tr ill ion ▁worth ▁of ▁fund ing ▁by ▁re h yp othe cation , ▁much ▁of ▁it ▁s our ced ▁from ▁the ▁UK ▁where ▁there ▁are ▁no ▁stat ut ory ▁limits ▁gover ning ▁the ▁reuse ▁of ▁a ▁client ' s ▁coll ater al . ▁ ▁It ▁is ▁estimated ▁that ▁only ▁$ 1 ▁tr ill ion ▁of ▁original ▁coll ater al ▁was ▁being ▁used