Collateral is support furnished to help ensure that a financial or contractual duty will be performed. It may take the form of property that can be claimed or realized if the duty is breached, or a separate party's promise to provide support. The person or entity furnishing that support is the collateral provider, and the person or entity benefiting from it is the collateral taker.
Source: European Central Bank (ECB) (source). This glossary entry is an independently worded adaptation of the cited information.