For example , a guarantor who is a depositor with a banking institution can set - off obligations he may owe to the bank under the guarantee against the bank 's obligation to repay his deposited assets .
Each party bears credit risk which may be offset .
A guarantor who is a depositor with a banking institution can set - off obligations he may owe to the bank under the guarantee against the bank 's obligation to repay his deposited assets .
Each party bears credit risk which may be offset .