Counterparty risk

1. Derivatives contracts.

When a contract is in the money, the risk that the other party to the contract fails for any reason, for example bankruptcy.

2.

More generally, the risk to each party to a contract that the counterparty will not meet its contractual obligations, whether they are unable, or simply unwilling, to do so.

See also

• Cash in the new post-crisis world
• CCR
• CRD IV
• Credit risk
• Guide to risk management
• In the money
• Putting a limit on losses
• Risk

Other resource

• Treasury essentials: Counterparty risk, The Treasurer, April 2013