Home
Sovereign Financing
Project Financing
Venture Capital
Financial Management
Consulting
Glossary
Agr. between Underwr.
Arbitrage
Asset-backed Com. P.
Asset-backed Securities
Back Office
Banker's Acceptance
Bank Notes
BIS
BHC
Bancruptcy Entity
Bank Trust Dep.
Bill
Bond
Book Entry Securities
Capital Markets
Cash Equivalents
CHIPS
Clearance
Contingent Liability
CLOs
Credit - Loan
Credit Default Swaps
Credit Enhancement
Credit Facility
Credit Line
Custodian
Debenture
Derivatives
DVP
Depository Trust Comp.
Discreet Funding
Distributing Syndicate
Edge Act
Eligible Paper
ERISA
EUROCLEAR
Eurobond
Euro-MTN
Euro Dollar
Exempt Securities
Factoring
Fedwire
Forfaiting
Group Sales
Guarantee
Hurdle Rate
High-Grade Bond
IDB
IBF's
IBRD
ICC
IMF
In (Cost)
Ineligible Securities
Issuing Agent
L/C
LDC
Leverage
Liquidity Facility
LIBOR
Loan
Managing Underwriter
Markdown
MTN
Merchant Bank
Money Center Bank
Money Market
Negotiable Instrument
Negotiated Underwriting
Nominee
NIF
Off balance sheet Fin.
OTC
Overcollateralization
Oversubscribed
Paper Dealer
PVD
Presold Issue
Primary Distribution
Primary Market
Prime Paper
Private Placement
Rediscount
Regulation T
Remote Orig. Conduit
Repo
Retention
Reverse Inquiry
RUF
Riskless Transaction
Riskless Principal
Rule 144
Rule 415
SBLC
SDFS
SDR
Secondary Market
Security Depository
Sec. Mark. Credit Act.
Secured Dept
Securitizations
Selling Group
Senior Dept
Short Term Dept
SPE
Spread Account
Spread (Underwriting)
Structured Note
SWIFT
TELEX
Test Keys
Trade for trade
Underwriter (securities)
Underwriting Agreem.
Underwriting Group
Underwriting Spread
Philanthropy
Links
Guestbook
Member Area
Legal Disclaimer
Contact
Impressum


Standby letters of credit are not linked directly to the shipment of goods and provide for payment to the beneficiary by the issuing bank in the event of default or nonperformance of the account party (the issuing bank’s customer) upon the presentation of a draft or the documentation, as required in the letter of credit. Standby letters of credit may relate to the payment of a purely monetary obligation, for example, when the credit is used in backing payment of commercial paper. A standby letter of credit, typically, is unsecured and is payable against a simple statement of default or nonperformance. Standby letter of credit transactions by member banks are subject to the legal restrictions of Regulation H and section 23A of the Federal Reserve Act. For reporting purposes, standby letters of credit are shown as contingent liabilities in the issuer’s Report of Condition. Under the revised capital/risk assets guidelines, banks now must allocate capital against standby letters of credit, although they are off-balance-sheet instruments. The process of foreign trade is also facilitated by various U.S. government agencies and international organizations. Some programs guarantee payments under letters of credit issued by commercial banks under programs to promote U.S. exports or at the request of international organizations which reimburse banks for letters of credit issued on their behalf. The most common government agencies include the following: The Export-Import Bank (Eximbank; an independent agency), Private Export Funding Corporation (PEFCO; a private corporation), Commodity Credit Corporation(CCC; a U.S. government agency), Agency for International Development (AID; the largest unit of International Development Co-operation Agency), International Bank for Reconstruction and Development (IBRD or World Bank; transnational organization), Inter-American Development Bank (IADB; oldest and largest multilateral development institution), and Overseas Private Investment Corporation (OPIC; self-sustaining U.S. government corporation). (Federal Reserve-Branch and Agency Examination Manual and Commercial Bank Examination Manual)