Bank Endorsement

DEFINITION of 'Bank Endorsement'

An endorsement by a bank for a negotiable instrument, such as a banker's acceptance or time draft, that assures the counterparty that the bank will stand behind the obligations of the creator of the instrument.

BREAKING DOWN 'Bank Endorsement'

Bank endorsements are common in international trade, where the business parties are typically unknown to one another. Banks stand in the middle by assuring good funds to the recipient. A bank endorsement, in the case of a banker's acceptance, for example, is the equivalent of a guarantee.

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