Accounting Dictionary

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

Banker's Acceptance

Definition: A banker's acceptance arises when a bank guarantees (or accepts) corporate debt, usually when it issues a loan to a corporate customer, and then sells the debt to investors. Because of the bank guarantee, a banker's acceptance is viewed as an obligation of the bank. If the bank has a good reputation, the acceptance can be re-sold in an open market, at a discount to its face value. A banker's acceptance is considered to be a very safe asset, and is used extensively in international trade.