banker's acceptance

(redirected from Bankers acceptance)
Also found in: Dictionary, Thesaurus, Medical, Encyclopedia.

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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Open market operations in government securities remained an important source of Federal Reserve credit throughout the 1920s and even more so during the early 193Os, when discount window loans and Federal Reserve purchases of bankers acceptances dwindled.
During 1930 and most of 1931, however, Fed purchases of government securities were insufficient to offset net declines in discount window loans and Fed purchases of bankers acceptances. Hence, total Federal Reserve credit outstanding fell (see Figure 3).
(20) The total increase in Federal Reserve credit was less than $1 billion because of declines in discount window loans and Fed holdings of bankers acceptances, but member bank reserves increased and the money stock stopped falling.
Those officials who were critical of open market purchases during the 1920s tended to argue that Federal Reserve credit should be extended only at the initiative of member banks, through the discount window or by sales of bankers acceptances to the Fed.
Reserve Banks process checks and provide a nationwide network for the collection of items ineligible for processing through normal check collection channels, such as matured coupons, bonds, and bankers acceptances. The Federal Reserve assisted in developing the automated clearinghouse (ACH) system for small-dollar electronic payments and now provides a nationwide electronic ACH network.