In many economies the use of collateral is the main way to secure bank financing. In this paper we consider the following mechanism of securitization: banks pool loans and sell them to investors as a security. However, the amount of securities a bank sells must be backed by the value of a real asset. Agents can trade securities in a financial market which opens before they visit a decentralized (non-Walrasian) market. Since securities are potentially accepted as a medium of exchange, agents can use them to re-allocate their portfolios according to their liquidity needs. In equilibrium, the price of securities reflects their liquidity properties. Fiat money has an essential role in the economy, if and only if the supply of the underlying asset is not sufficiently large to back up all the demand for liquidity. In this case, we are able to link inflation generated by expansionary monetary policy with the rate of return on and the price of both the securities and the collateral.