To offset any default, 5 percent of the loan is deposited at a bank as a guarantee, and a solidarity group of five to eight households is formed to share responsibility for the member's loan repayments.
They would also like to see a joint bank deposit guarantee scheme and a fund for winding down banks.
Another quasi-government security is a bank bond with a guarantee from the Federal Deposit Insurance Corp.
That's why a low leverage ratio is not a guarantee that a bank is safe.
In most states, when a bank forecloses on a landlord, the tenant has no guarantee of being allowed to stay in the property, and neither the bank nor the landlord has a legal obligation to tell the tenant about the foreclosure.
It is also the result of a federal guarantee of bank notes sold to the public at subsidized rates of interest.
In February MEPs voted to increase the amount of money given by the EU to the bank as a guarantee for these loans.
Tiny Ireland, with its oversize banks, has just augmented its insurance scheme by giving a blanket government guarantee to bank deposits and liabilities.
Also, on the other side of the world, the governments of Australia and New Zealand have announced a blanket guarantee of all bank deposits.
There is no guarantee that a bank will approve a short sale, but according to realtors who specialize in short sales having a financial hardship makes a difference with the lenders.
Yet the ECB only wants the job if it gets new powers, and access to funds, to restructure and wind down ailing banks, all backed by a credible system to guarantee bank deposits.
Proprietary trading is harder to defend when it is sheltered by a government guarantee but any bank that acts as a marketmaker between buyers and sellers will end up taking some form of proprietary risk.
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In the meantime, the major banks must be put under the direction of the European Central Bank in exchange for a temporary guarantee and permanent recapitalization.
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For example, Bank of America offers a zero liability guarantee for their consumer debit and credit cards.
It would be able to borrow money, with a government guarantee, either from the Bank of Japan or from the finance ministry's trust-fund bureau, which manages postal-savings money.
All of the other ELA debt was contracted under the Facility Deed which according to the Anglo Irish Bank Annual Report 2010 is an unsecured loan facility guaranteed by the Minister for Finance who separately benefits from a counter indemnity from the Bank should the guarantee be called upon.
Ten days short of the deadline a banker at ICICI Bank agreed to provide the guarantee, accepting Atul's word as collateral.
She said that those clamouring for Germany to "pour billions into eurobonds, stability funds, European bank deposit guarantee funds" wanted a quick crisis fix that was unsustainable.
But even banks that claim to comply with it now, such as Britain's NatWest and Germany's Deutsche Bank, say they cannot guarantee a transfer time of less than six days for most payments by wire.
Another troubled bank was folded into HSBC, with a guarantee, according to some.
One trick: An S corp shareholder who has agreed to guarantee a portion of a company s bank loan, though he may never have to pay out a dime, may still try to claim that theoretical indebtedness as a loss.
What happens when the debt of a bankrupt S corp, owned by solvent taxpayers who didn't personally guarantee the debt, is written off by a bank?
Then again, when you look at how that marriage turned out, it proves that breaking the bank to pay for your wedding does not guarantee a successful marriage.
On April 7th Subir Gokarn, a deputy governor of the central bank, suggested ending the implicit guarantee that states have from the centre, so that the profligate would face higher interest rates.
Some had taken decisive action overnight: Belgium nationalized the Belgian assets of banking and insurance provider Fortis on Sunday, before selling a majority stake to French bank BNP Paribas, while Germany said it would guarantee all private deposits in the country.
The problem came to light in February, when one bank was revealed to be months behind in meeting its guarantee to a South Korean company.
Creating a European equivalent of the FDIC -- through a banking union -- would pool the eurozone's insurance to guarantee bank deposits, and thus reassure investors.
One advantage of lending to a bank is that because it can spread risk over thousands of loans, it can guarantee individual deposits.
Critics worry that the Bank will lose its leverage to enforce corporate and social reform, because a guarantee loses it the option of stopping loan disbursement.
When the U.S. Treasury and Federal Reserve Board decided to guarantee bank debt and inject capital into our major banks, it started a chain reaction in several sectors of the bond market.
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