Generally speaking, if the bank gives the lender an unsecured working capital loan of 5 million, the risk exposure is 5 million; If the bank gives the borrower a "bank acceptance bill" with a deposit of 30%, the risk exposure is 500 x (1-30%) = 3.5 million.

Letter of credit exposure is generally the risk exposure of banks to open letters of credit to domestic importers. For example, if the issuing bank is required to pay a 20% deposit and the bank opens a letter of credit of 100%, the exposure of the letter of credit will be 80%.

Letters of credit include the following contents:

(1) Description of the letter of credit itself. Such as its type, nature, validity period, failure location, etc.

(2) Requirements for goods. According to the contract description.

(3) Requirements for transportation.

(4) Document requirements, that is, cargo documents, transport documents, insurance documents and other relevant documents.

(5) Special requirements.

(6) The responsibility of the issuing bank to guarantee payment to the beneficiary and the bill holder.

(7) Most foreign certificates indicate: "Unless otherwise specified, this certificate shall be handled in accordance with the uniform customs of documentary credits of the International Chamber of Commerce, that is, the publication No.600 of the International Chamber of Commerce (ucp600)."

(8) T/T compensation clause.