Assessing Credit Risk - World Bank
4 Define the Risk zCredit risk is: – Risk of default: The risk that a counter party will be unable to perform as agreed. – Risk of loss: The risk that as a result of a counter party's inability to perform as agreed, the lender suffers a loss. zAccounting losses zEconomic losses zInherent risk is the aggregate credit risk that exists in a bank’s book of business* due to the nature of the ................
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