banker's acceptance

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Banker's acceptance

A short-term credit investment created by a nonfinancial firm and guaranteed by a bank as to payment. Acceptances are traded at discounts to face value in the secondary market. These instruments have been a popular investment for money market funds. They are commonly used in international transactions.

Banker's Acceptance

Short-term debt obligations that are secured by banks. That is, a bank promises to pay a creditor if a borrower defaults. It is also called a documented discount note.

banker's acceptance

A short-term credit instrument created by a nonfinancial firm and guaranteed by a bank as to payment. Acceptances are traded at discounts from face value in the secondary market on the basis of the credit quality of the guaranteeing banks. These instruments have become a popular investment for money market funds. Also called acceptance.
References in periodicals archive ?
A Bankers' Acceptance (BA) is basically a time draft, which is endorsed by a commercial bank.
The results show that whereas the highest contribution comes from the Treasury Bills with a t-value of 8.484, the least contribution however, is from treasury certificates with a t-value of 0.311.Others are bankers' acceptances, certificates of deposits and commercial papers with t-values of 1 405, 1.147 and 0.930 respectively (see tables 4.4, 4.5).This order of importance is depicted thus;
Bankers' acceptance can be issued by individuals, companies or another bank and accepted by a bank on behalf of its customers (Ezema, 1993).
Export-credit insurance, which is provided through the private market and government-sponsored agencies, offers a lower cost alternative to bankers' acceptances. BAs are regulated by the Federal Reserve, and prior to 1977, were traded and held by the Federal Reserve for monetary policy purposes.
Peter "Institutions and the Development of Liquid Markets: The Case of the Bankers' Acceptance, 1914-1934." Unpublished manuscript, Macalester College, 2001.
Table 1, taken from Meulendyke (1998), shows that bankers' acceptances were the primary asset class for the Federal Reserve portfolio until World War I, and acceptances had a roughly equal presence with Treasury securities through the 1920s.
Although commercial paper was bought, endorsed, and sold by bill brokers and commercial paper houses from the 1840s, the secondary market was very thin, since interbank rediscounting of commercial paper was extremely rare.(38) Most important, there were no primary or secondary markets in bankers' acceptances, the era's main instrument of short-term international finance.
Bankers' acceptance (B/A) financing in the last decade has increased more than tenfold, to a large extent reflecting the expansion of U.S.
Summary: Gross bank assets, including bankers' acceptances, increased by 0.9%
Gross bank assets, including bankers' acceptances, increased by 0.3 per cent, rising from Dh2,687.1 billion at the end of November 2017 to Dh2, 695 billion at the end of December 2017.
However, core shadow banking activity - including entrusted loans, trust loans, and undiscounted bankers' acceptances - has continued to grow, increasing in share when compared with the broad shadow banking sector.'
Advances under the revolving operating credit facility are subject to certain conditions of drawdown, and may be made by way of Canadian prime rate loans, bankers' acceptances or letters of credit.