What is default rate in SAP FS-CMS - Collateral Management System?

SAP Term: default rate

• Component: FS-CMS

• Component Name: Collateral Management System

• Description: A payment obligation of the guarantor obtained from the agreement between the guarantor and the bank. This obligation is obtained in the form of a percentage share on the existing default of the bank.

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• Key Concepts: 
  Default rate is a feature of the FS-CMS Collateral Management System (CMS) that allows users to set a default rate for each collateral type. This rate is used to calculate the amount of collateral that must be posted for a given transaction. The default rate is set by the user and can be adjusted as needed.
  
  How to use it: 
  To use the default rate feature, users must first select the collateral type they wish to use. Once selected, they can then enter the desired default rate for that collateral type. This rate will then be used to calculate the amount of collateral that must be posted for any transactions involving that collateral type. 
  
  Tips & Tricks: 
  It is important to remember that the default rate is only used as a starting point for calculating the amount of collateral required for a given transaction. Depending on the specifics of the transaction, additional collateral may be required in order to fully cover the risk associated with it. 
  
  Related Information: 
  For more information on how to use the default rate feature in FS-CMS, please refer to the official documentation provided by SAP. Additionally, there are many online resources available that provide detailed tutorials and best practices for using this feature.