Banker's acceptance and Close-out netting: Difference between pages

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A special form of netting that occurs following some predefined event such as default. 
Close-out netting is intended to reduce exposures on open contracts if one party meets certain conditions specified by the contract (for example, becomes subject to insolvency procedures) before the settlement date.


A bill of exchange (draft) which has been accepted by a bank.
Also referred to as default netting, open contract netting or replacement contract netting.


A draft accepted by a bank constitutes an unconditional and binding obligation on the part of the bank to pay the draft at maturity.


== See also ==
== See also ==
* [[Acceptance]]
* [[Netting]]
* [[Bill of exchange]]
* [[Draft]]
* [[Trade acceptance]]
 
[[Category:Asset_and_Project_Finance]]
[[Category:Bank_Lending]]
[[Category:Debt_Capital_Markets]]
[[Category:Trade_Finance]]

Revision as of 21:26, 28 April 2016

A special form of netting that occurs following some predefined event such as default. Close-out netting is intended to reduce exposures on open contracts if one party meets certain conditions specified by the contract (for example, becomes subject to insolvency procedures) before the settlement date.

Also referred to as default netting, open contract netting or replacement contract netting.


See also