Credit Risk

 

Credit Risk or Default Risk is the risk of the loss of principal when a borrower fails to make payments as promised. If a borrower stops making payments, eventually he/she will be in default. Credit Risk can be further broken down into Credit Spread Risk, Default Risk, and Downgrade Risk. Often, external firms, like Standard & Poor's, Moody's and Fitch analyze and deciding on a credit rating, which is directly related to the credit risk of a borrower. Another part of credit risk is the risk of a government becoming unable to meet loan obligations, which is called sovereign risk

Related Concepts: Bonds Concentration Risk Governance Market Risk Operational Risk Securitization Sovereign Risk   Available Positions Related to Credit Risk: Alternative Investments jobs Asset & Investment Management jobs Financial Services Operations jobs Wealth Management jobs

Relevant Functional Areas: Asset Management Broker Dealer Brokerage Operations Hedge Funds Sales & Trading Wealth Management   Related Job Titles: Account Reference Data Chief Risk Officer Enterprise Risk Manager Risk Auditor   Synonyms: Counter-party Risk Default Risk