Banker's Acceptance - Explained
What is a Banker's Acceptance?
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
-
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Business Management & Operations
- Economics, Finance, & Analytics
- Courses
Table of Contents
What is a Banker's Acceptance?A Little More on What is a Banker's AcceptanceAcademics research on Banker's Acceptance BAWhat is a Banker's Acceptance?
A banker's acceptance (BA) is a debt instrument which is guaranteed by a commercial bank and issued by an individual company. A bankers acceptance represents the commitment of a commercial bank to make a payment in the future. A bankers acceptance can also be referred to as a commercial bank draft which reflects the commitment of the bank to pay whoever holds the acceptance a certain amount at a future date.
Back To: COMMERCIAL LAW: CONTRACTS, PAYMENTS, SECURITY INTERESTS, & BANKRUPTCY
How Does a Banker's Acceptance Work?
A bankers acceptance is a draft that states the amount of money the holder of the instrument must be paid at a specified date. Bankers acceptances are issued by companies and backed by commercial banks. The short-term debt instrument allows the holder or bearer to receive the amount stated in the acceptance on the specified date. Being a short-term negotiable instrument, a bankers acceptance can have a maturity date which ranges from 30 to 180 days.
Related Topics
- Promissory Note
- Cashier's Check
- Convenience Check
- Certified Check
- Substitute Check
- Bill of Exchange
- Bank Draft
- Sight Draft
- Bankers Acceptance
Academics research on Banker's Acceptance BA
- Macroeconomic surprises and stock returns in South Africa, Gupta, R., & Reid, M. (2013). Macroeconomic surprises and stock returns in South Africa.Studies in Economics and Finance,30(3), 266-282.
- Index participation units and the performance of index futures markets: Evidence from the Toronto 35 index participation units market, Park, T. H., & Switzer, L. N. (1995). Index participation units and the performance of index futures markets: Evidence from the Toronto 35 index participation units market.The Journal of Futures Markets (1986-1998),15(2), 187.
- A directional analysis of the Bureau for Economic Research's quarterly forecasts, Van Walbeek, C., & Sessions, M. (2007). A directional analysis of the Bureau for Economic Research's quarterly forecasts.
- THE YEAREND EFFECT IN MONEY MARKET YIELDS: BEYOND ONE MONTH AND BEYOND THE CRISIS, Kotomin, V. (2013). THE YEAREND EFFECT IN MONEY MARKET YIELDS: BEYOND ONE MONTH AND BEYOND THE CRISIS.Journal of Financial Research,36(2), 233-252. U.S. money market yields up to one month have shown changes consistent with yearend liquidity preferences. I find that three and sixmonth negotiable certificate of deposit (CD), Eurodollar deposit (ED), and banker's acceptance (BA) yields are also affected by yearend liquidity preferences. Two and threemonth financial commercial paper (CP) yield changes are less pronounced. BanksCD, ED, and BA issuershave increased yearend liquidity needs, unlike finance companiespredominant CP issuers. The yearend effect disappears after the 20072008 crisis as depositories' cash holdings increase. CD, ED, and CP yields diverge postcrisis, suggesting that investors no longer consider them close substitutes.
- Response to Liberalization: Changing Corporate Finance Strategies, Okubo, T. (1985). Response to Liberalization: Changing Corporate Finance Strategies.US-Japan Relations: Learning from Competition, 203.