credit risk


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Related to credit risk: Market risk, Liquidity risk, Operational risk

Credit risk

The risk that an issuer of debt securities or a borrower may default on its obligations, or that the payment may not be made on a negotiable instrument. Related: Default risk.

Default Risk

The risk that a debtor will be unable to pay back its loans. Default risk goes up if a debtor has large number of liabilities and poor cash flow. Generally speaking, companies and persons with high default risk stand a greater chance of a loan being denied and pay a higher interest rate on the loans they do receive. See also: Bankruptcy.

credit risk

The risk that a borrower will be unable to make payment of interest or principal in a timely manner.
References in periodicals archive ?
RAGE's Credit Risk RTI(TM) Basic offer also includes alerts for any set of 100 Private Companies, using RAGE's Big Data engine that monitors global and local events real time.
The Ambit credit risk management solution is to be used for credit assessment and credit portfolio monitoring for risk-based decisions, pricing and improved capital and credit risk management.
Husain, Senior Conference Producer at Fleming Gulf quotes C[pounds sterling]In light of the challenges posed by rapidly evolving credit markets and unprecedented growth of the Middle East financial sector, effective credit risk management has indeed become one of the most important aspects of a successful financial institution's operation.
Credit risk and receivables management functions have to be coordinated, with the front-end credit evaluation properly limiting risk of bad-debt write-offs, while the back end collections have to be automated to accelerate customer payments.
The Basel Committee comment letter also discussed the own credit risk issue.
A solvent banking system, ready and able to take credit risk, would also remove a major source of deflationary pressure.
Compliance with approved policies, such as whether the entity adhered to established market and credit risk limits, the reporting of any instances in which such limits were exceeded and whether appropriate remedial action was taken.
Identifies the technology vendors banks should shortlist when considering the purchase of a credit risk management solution
In contrast to Basel I, which applies the same framework to all covered banks, Basel II, as currently proposed, offers three options for measuring credit risk and three for measuring operational risk.
There's no credit-quality standard requiring an institution to accept only counterparties of AA or better, but in the last five years, the quality of credit risk that sponsors are willing to accept has risen.
Of most immediate interest to both users and preparers of financial statements is the planned final statement based on the revised ED, Disclosure of Information about Financial Instruments with Off-Balance-Sheet Risk and Financial Instruments with Concentrations of Credit Risk.
While governments and regulatory bodies are trying to revive their economies and are pressuring banks to increase their lending, the industry's ability to manage credit risk remains weak.