Credit Risk

Description of Credit Risk. Explanation.

Definition Credit Risk. Description.

Credit Risk is the risk a firm runs that a counterparty to a loan, trade, or transaction will be unable or unwilling to pay for the transaction or repay the loan at maturity.

Companies try to counter credit risk through determining the credit rating of their counterparties, using credit scoring techniques.

Compare with: Credit Rating  |  Credit Scoring  |  RAROC  |  Strategic Risk Management  |  Hedge  |  Non-Systemic Risk  |  Systemic Risk

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End of description Credit Risk. An explanation.