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Donít Issue Blank Cheques!

Cheque Issuing Best Practice

"A few months ago, I got a call from a friend who is the Global Controller of a small Belgian multinational company. He was seeking an opinion on how to prevent one of their customers drawing on two bank guarantees for a quite significant amount, representing almost 40% of the group’s net annual income! Unfortunately, I couldn’t help him, as the wording of these advance payment and performance bonds matched the terms which should never be accepted by any issuer…."

Experienced treasury professional Patrick Verspecht discusses the risks of issuing bank guarantees and shares seven vital rules to adhere to when doing so.

Key Points

  • Views and best practices when it comes to issuing bank guarantees
  • Trade finance risks
  • The non-negotiable rules every treasurer should follow



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Patrick Verspecht

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This article is available as part of an extensive case studies collection: Risk Management Series

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