Banker's acceptance

How it is used

The bank's acceptance changes the payment obligation; it is more than checking the document's format.

Example sentences

1. The exporter discounted the banker's acceptance before its maturity.

   The accepted instrument can be sold for earlier cash.

2. The investor assessed the accepting bank before buying the banker's acceptance.

   The bank's promise is central to the instrument's credit quality.

Common collocations

• discount a banker's acceptance
• banker's acceptance maturity

Related terms

• bill of exchangeA written order from one party to another to pay a fixed amount to a named person, either on demand or on a set future date, used mainly in trade.
• credit riskThe risk that a borrower or another party will not pay back money it owes on time or in full, causing a loss for the lender.

More terms: Treasury & Markets

• treasury
• yield
• securities
• derivative
• forward contract
• swap
• repo
• clean price
• dirty price
• duration
• convexity
• initial margin