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)