Category: Finance Law
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Foreign Credit Insurance Association
An association of fifty U.S. insurance companies that operates in conjunction with the EXPORT-IMPORT bank (read this and related legal terms for further details), or Eximbank, to insure commercial risks associated with e…
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Open Policy
Marine insurance policy issued to cover various unspecified voyages over the life of the policy. An open policy is issued to a firm engaged in extensive shipping transactions, the details of which are probably unknown at the time the policy is issued; usually, the policyholder declares his […]
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Commercial Risk
The risk borne by an exporter that his foreign customer may be unable to pay for merchandise imported under open account terms. Commercial risk is contrasted with political risks, which arise from governmental actions and are unrelated to the financial condition or credit-wor- thiness of the […]
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Blocked Exchange
An exchange restriction, imposed by governmental authority, that forbids the unlicensed purchase of bills of exchange, currency, or negotiable instruments denominated in a foreign currency. The object of this measure is to prevent transmission of foreign currency reserves out of the country. […]
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Soft Loan
A loan repayable by a foreign borrower in a Soft Currency (read this and related legal terms for further details). Such loans usually have been the product of long-term sales to countries without hard currency repayment …
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Threshold
In Collateralization The underlying commercial reason for Thresholds is that often parties will be willing to take a certain amount of credit risk to each other (equal to the Threshold) before requiring collateral to cover any additional risk. Banks, in particular, are in the business of […]
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All Risks
A form of marine insurance coverage which provides that the insurer will be liable to the policyholder for all risks of loss or damage attributable to external forces, other than perils expressly omitted….
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Aval
A form of guarantee given by a bank or other party to enhance the value of a negotiable instrument. While an aval acts as an unconditional and transferable guarantee of an instrument, the exact scope or nature of the guarantee may not be evident. Avals are well established in Continental law […]
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Forfaiting
A means of financing trade based upon the transfer of debt obligations arising from the sale of goods and services, usually exports. The merchant sells to the forfaiter, without recourse, the debt obligation of the foreign purchaser, usually in the form of a trade bill of exchange or promissory […]
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Berne Union
An association of public and private financial institutions engaged in issuing export credit insurance. Known officially as the International Union of Credit and Investment Insurers, the group was founded at Berne, Switzerland, in 1934 to establish uniform criteria and standards for export […]
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Gold Reserves
The gold held by a nation as reserves for currency issued. After U.S. abandonment of the gold standard in 1933, Congress mandated that the Federal Reserve banks would have to hold gold certificates, reflecting gold on deposit with the U.S. Treasury equivalent to at least 25 percent of currency […]
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Free of Particular Average
A clause in a basic marine cargo insurance policy restricting settlements in the case of partial losses attributable to perils of the sea or incidents where the vessel has been sunk, burned, or stranded during the course of the voyage. An F.P.A. policy provides the most limited coverage. The […]
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Vostro Account
Funds denominated in local currency that a foreign bank holds in a local bank. …
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Encyclopedia of Business and Finance
Encyclopedia of Business and Finance Details Title: Encyclopedia of Business and Finance. Edition: 2nd ed. Editor: Burton S. Kaliski. Copyright: 2006. Pages: 791p. Review to the Encyclopedia of Business and Finance “This encyclopedia is designed to “summarize the body of knowledge that we know as business in one place and in language appropriate to the…
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Committee on Banking Regulations and Supervisory Practices
Known commonly as the Cooke Committee, a working party established under the auspices of the bank for INTERNATIONAL SETTLEMENTS (read this and related legal terms for further details) in 1975 to seek to remedy inadequaci…