Collateral - generally defined as an asset used to provide security for a lender's loan - is an important feature of credit contracts and all the available evidence suggests that its use is getting more pervasive. This book builds upon recent research on the topic. This research has generally followed two paths. The first explains why collateral is so widely used and how it can be used strategically by the agents involved in the financial transaction. The second focuses on the impact that the provision of collateral can have on the economy's equilibrium.