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The Uniform Customs and Practice for Documentary Credits (UCP) is a set of rules on the issuance and use of letters of credit. The UCP is utilized by bankers and commercial parties in more than 175 countries in trade finance. Some 11-15% of international trade utilizes letters of credit, totaling over a trillion dollars (US) each year.
Transaction banking. Transaction banking can be defined as the set of instruments and services that a bank offers to trading partners to financially support their reciprocal exchanges of goods (e.g., trade), monetary flows (e.g., cash), or commercial papers (e.g., exchanges). Transaction banking allows banks to maintain close relationships with ...
In banking and finance, clearing denotes all activities from the time a commitment is made for a transaction until it is settled. This process turns the promise of payment (for example, in the form of a cheque or electronic payment request) into the actual movement of money from one account to another. Clearing houses were formed to facilitate ...
In the modern banking industry collateral is mostly used in over the counter (OTC) trades. However, collateral management has evolved rapidly in the last 15–20 years with increasing use of new technologies, competitive pressures in the institutional finance industry, and heightened counterparty risk from the wide use of derivatives, securitization of asset pools, and leverage. As a result ...
A Systemically Important Payment System ( SIPS) is a payment systems whose failure could potentially endanger the operation of the whole economy. In general, these are the major payment clearing systems or real-time gross settlement systems of individual countries, but in the case of Europe, there are certain pan-European payment systems.
A central clearing counterparty ( CCP ), also referred to as a central counterparty, is a financial market infrastructure organization that takes on counterparty credit risk between parties to a transaction and provides clearing and settlement services for trades in foreign exchange, securities, options, and derivative contracts.
Trade finance is a phrase used to describe different strategies that are employed to make international trade easier. It signifies financing for trade, and it concerns both domestic and international trade transactions.
The terms of trade ( TOT) is the relative price of exports in terms of imports [1] and is defined as the ratio of export prices to import prices. [2] It can be interpreted as the amount of import goods an economy can purchase per unit of export goods. An improvement of a nation's terms of trade benefits that country in the sense that it can buy ...