BLO 3405 Lecture Notes - Lecture 12: Bitcoin, European Payments Council, Syndicated Loan
31 Jul 2021
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Document Summary
If an australian exporter sells goods to an overseas buyer, the following problems may arise: The seller wishes to be paid early, the buyer wants to pay as late as possible. The seller and the buyer will be concerned of the other"s solvency. The buyer will be concerned the goods meet contract specifications: documentary credits. The documentary transaction" can solve many of these problems: basically, the buyer agrees to purchase documents that represent the goods. The essential features of a dlc are as follows: The dlc is a unilateral promise by the bank to the seller. The obligation is to pay against the presentation of specified documents. The promise is independent of the sale contract: documentary credits, related instruments. Similar instruments to the dlc are used to make payment on default or non performance: a demand guarantee is a promise that the bank pay the seller on demand.
