Did he own the shares?
If yes, then why should he not use them as collateral? If he was using someone else's shares, or claimed they were worth more than their 'current' trading value, then I can see why there would be a problem, but if a bank is prepared to allow him to put up something with such limited intrinsic value ("Remember, share prices can go down as well as up") and he owns the shares in question, what exactly is the problem?
Of course, if banks did the sensible thing and still used paper and metal money then we wouldn't get in the situation where Bank A lends to Bank B, Bank B to Bank C, Bank C to Bank D and so on around the world until one of them asks for some of the money back, and then they suddenly realise that all they have really loaned each other is vapourware "money" with no 'Real World' physical presence beyond the electrical charge on a mass of HDDs...
Bank Qnnn suddenly realises their high-risk "customers" can't repay them the sums owing on their Sub-Prime loans so "asks" Bank Rnnn for some of their funds back so they can pay their next installment to Bank Pnnn. Unfortunately Bank Rnnn is also low on funds so calls in their loan to Bank Snnn, who call in their loan to Bank Tnnn, who call in their loan to... and so on until the dozy gits suddenly realise that nobody actually has any real money at all, and the entire world economy goes down the pan because the so-called expert Money Men (with their huge bonuses and taste for the high life) are, in reality, little more than glorified snake-oil salesmen with flash cars and expense accounts instead of a tatty old horse-drawn wagon and penchant for screwing over gullible cowboys...
In memory of Douglas Adams, I suggest we recreate the World economy using the LEAF as the unit of fiscal exchange. That way, the economists dream will finally come to fruition (no pun intended) and money will, literally, grow on trees...
Biting the hand that feeds IT
