Exposure: Difference between revisions
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1. ''Financial risk.'' | |||
An asset, a liability, or a net position which might give rise to a loss if there were to be an adverse change in general market prices or rates, or in the credit strength of a counterparty. | An asset, a liability, or a net position which might give rise to a loss if there were to be an adverse change in general market prices or rates, or in the credit strength of a counterparty. | ||
For example, a borrowing at the floating market rate of interest exposes the borrower to the risk of a rise in market rates. Because if the market reference rate went up before an interest resetting date, the borrower would have to pay a higher rate of interest on their borrowing. | For example, a borrowing at the floating market rate of interest exposes the borrower to the risk of a rise in market rates. Because if the market reference rate went up before an interest resetting date, the borrower would have to pay a higher rate of interest on their borrowing. | ||
2. ''Risk - risk management.'' | |||
Alternative name for risk. | |||
== See also == | == See also == | ||
* [[Exposure period]] | * [[Exposure period]] | ||
* [[Financial risk]] | |||
* [[Interest rate risk]] | * [[Interest rate risk]] | ||
* [[Internal exposure management technique]] | * [[Internal exposure management technique]] | ||
* [[Position]] | * [[Position]] | ||
* [[Risk]] | |||
* [[Risk management]] | |||
* [[Risk policy]] | * [[Risk policy]] | ||
[[Category:Manage_risks]] |
Latest revision as of 05:14, 1 April 2022
1. Financial risk.
An asset, a liability, or a net position which might give rise to a loss if there were to be an adverse change in general market prices or rates, or in the credit strength of a counterparty.
For example, a borrowing at the floating market rate of interest exposes the borrower to the risk of a rise in market rates. Because if the market reference rate went up before an interest resetting date, the borrower would have to pay a higher rate of interest on their borrowing.
2. Risk - risk management.
Alternative name for risk.