Banking: Borrowing from bank
A to pay off bank B and then borrowing from bank C to pay off bank A ... and so on without ever paying off the originally borrowed principal
. This scheme
collapses when interest payments become too large for the debtor
, resulting in bankruptcy
if a debt consolidation
is not arranged.
Corporate: Taking control
of a firm (subsidiary) through majority shareholding and then taking control of another firm with the combined shareholding ... and so on to build
a large holding company
that provides managerial and financial
(and sometimes marketing) functions for the entire group
Finance: Using paper profits to build
up a portfolio
Real estate: Purchasing additional properties by borrowing against the currently owned properties.