Reference Entry

counter-party credit risk

Edited by John Black, Nigar Hashimzade and Gareth Myles

in A Dictionary of Economics

Fourth edition

Published in print January 2012 | ISBN: 9780199696321
Published online May 2013 | e-ISBN: 9780191759130
counter-party credit risk

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The risk when selling goods on credit that the purchaser may fail to make payments when they become due. Credit for short periods can be given against a trade bill, which can be discounted, so that the seller receives cash immediately and passes the credit risk to whoever buys the bill. For longer-term credits it may be possible to insure the risk, possibly via an official agency such as the UK ...

Reference Entry.  85 words. 

Subjects: Economics

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