Pledging an asset means handing it over as collateral for a loan: if the borrower doesn't pay, the lender can seize that collateral to recover the debt, without the owner having to sell the asset upfront.
Common examples
- Securities-backed loan: a bank lends you money using your portfolio of funds or shares as collateral, letting you access liquidity without selling your investments (and without triggering a capital gain subject to IRPF).
- Pledged deposit: a term deposit is used as collateral for another loan (for example, to get better terms on a mortgage).
The main risk
If the value of the pledged asset falls below a certain threshold (common when shares or funds are pledged), the bank can demand additional collateral or enforce the pledge, similar to a margin call on a leveraged position.