Letter of credit and MRBB: Difference between pages

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imported>Doug Williamson
(Link with Documentary collection page and contrast with Documentary collection.)
 
imported>Doug Williamson
(Remove surplus text.)
 
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(LC).  
''Bank supervision - capital adequacy.''


A promise document issued by a bank or another issuer to a third party to make a payment on behalf of a customer in accordance with specified conditions.
Market Risk in the Banking Book.
 
Letters of credit are frequently used in international trade to make funds available in a foreign location.
 
 
 
==== Letter of credit contrasted with documentary collection ====
Letters of credit are often contrasted, from the perspective of a seller, with an alternative structure of [[documentary collection]]s.
 
A letter of credit is a ''direct'' obligation of a bank to pay (against specified documents).
 
A documentary collection means a bank ''collecting'' payment from the buyer (by presenting documents to the buyer).
 
A letter of credit therefore gives superior protection to the seller against credit risk or delayed cash flow, or both.
 
For this reason letters of credit are more expensive to arrange.


The risk associated with a change in market rates and prices, and affecting a bank's banking book, as opposed to its trading book.




== See also ==
== See also ==
* [[Advising bank]]
* [[Bank supervision]]
* [[Bank payment obligation]]
* [[Capital adequacy]]
* [[Clean letter of credit]]
* [[Interest Rate Risk in the Banking Book]] (IRRBB)
* [[Commercial risk]]
* [[Market risk]]
* [[Condition]]
* [[Market Risk in the Banking Book]]
* [[Confirmed letter of credit]]
* [[Trading book]]
* [[Confirming bank]]
* [[Credit]]
* [[Documentary collection]]
* [[Documentary credit]]
* [[Irrevocable letter of credit]]
* [[Issuing bank]]
* [[LOC backed]]
* [[Standby letter of credit]]
* [[Trade finance]]
* [[Uniform Customs and Practice for Documentary Credits]]
 
 
===Other links===
[http://www.treasurers.org/node/5279 Letters of credit and supply chain finance, Will Spinney, ACT 2009]
 
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Trade_finance]]

Revision as of 08:40, 24 June 2022

Bank supervision - capital adequacy.

Market Risk in the Banking Book.

The risk associated with a change in market rates and prices, and affecting a bank's banking book, as opposed to its trading book.


See also