Declaration of Backing

From Open Risk Manual

Definition

A Declaration of Backing (also Unrestricted Letter of Comfort) is legal statement whereby an issuer ensures (with only certain specific exception, eg in the case of Political Risk) that selected group entities are able to meet their contractual liabilities.

If this should not be the case, the receiver of this declaration (typically a lender to one of the selected group entities) can sue the issuer for damages.[1]


References

  1. BCBS, Report on intra-group support measures, February 2012

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