Credit Risk
/ˈkrɛdɪt rɪsk/
Definitions
- (n.) The risk that a borrower or counterparty will fail to meet their obligations in accordance with agreed terms, leading to financial loss.
The bank assessed the credit risk before issuing the loan.
Related terms
See also
Commentary
Credit risk calculations often inform contract terms and regulatory capital requirements in financial law.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.