Correction and Credit risk: Difference between pages

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imported>Doug Williamson
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A rapid downward change in a market price, considered to be the result of earlier overvaluation.
1.
 
The risk that a counterparty will not settle an obligation for full value, either when due or at any time thereafter. 
 
In exchange-for-value settlement systems, the risk is generally defined to include both replacement cost risk and principal risk.
 
 
2.
 
A weighted measure reflecting both the maximum possible amount of the credit loss (also known as the credit exposure), and the likelihood of such loss.




== See also ==
== See also ==
* [[Multiples valuation]]
* [[Banker's payment]]
* [[Shareholder value]]
* [[CCR]]
* [[Value driver]]
* [[Counterparty risk]]
* [[Covenant]]
* [[Credit]]
* [[Credit default swap]]
* [[Credit derivative]]
* [[Credit exposure]]
* [[Credit rating]]
* [[Credit rating agency]]
* [[Credit risk diversification]]
* [[Capital risk]]
* [[ECL]]
* [[Event risk]]
* [[Exchange-for-value system]]
* [[High-yield]]
* [[KMV]]
* [[Merton distance-to-default]]
* [[Operational risk]]
* [[Pre-settlement risk]]
* [[Price risk]]
* [[Prime bank]]
* [[Principal risk]]
* [[Putting a limit on losses]]
* [[Replacement cost risk]]
* [[Reputational risk]]
* [[Risk mitigation]]
* [[Sovereign risk]]
* [[TED spread]]
* [[Transaction risk]]
 
[[Category:Manage_risks]]

Revision as of 12:04, 6 July 2022

1.

The risk that a counterparty will not settle an obligation for full value, either when due or at any time thereafter.

In exchange-for-value settlement systems, the risk is generally defined to include both replacement cost risk and principal risk.


2.

A weighted measure reflecting both the maximum possible amount of the credit loss (also known as the credit exposure), and the likelihood of such loss.


See also