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 ?
New and innovative computational approaches to assessing credit and credit risk
Our analysis indicates that Islamic banks exhibit lower credit risk than do conventional banks (p < 0.01).
Credit risk is heightened by increased numbers of borrowers who fail to meet the repayment obligations on their loans, and is measured by non-performing loan rates.
* It is a consistent and easy way to talk about credit risk throughout the life of the loan, from underwriting to calculating ALLL
Risk components have been increased dramatically in the recent years, especially in the case of health and safety issues, it is also true in the case of financial products, for example, credit risk [4].
D&B's Turkey Credit Risk Index for the third quarter of 2013 was 1072, slipping to 1035 in the fourth quarter.
In the real credit risk contagion, the existence of correlated noises and their interactive driving is also prevalent and very often is the main cause for stochastic default of credit activity participants.
This paper examines how the factors and characteristics of determinants of credit risk in Jordanian banking for the period 2006 to 2010.
Saunders, 1997, Credit Risk Measurement: Developments over the Last 20 Years, Journal of Banking and Finance, 21: 1721-1748.
When it comes to the assessment of an entire portfolio of accounts, Credit Value-at-Risk (CVAR) is used as a tool to measure and control the credit risk. Please keep in mind that no prescribed methodology exists for quantifying the capital required by a firm to back credit risk positions.
For months now, Washington's focus has quietly been shifting away from the theoretical constructs of Basel II and toward the very real risk issues of counterparty credit risk and liquidity.
* using loan-to-value ratios, credit assessments, and other broad measures of credit risk for assigning risk weights to residential mortgages;