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This risk is called credit risk. Banks are prudentially regulated to make this risk lower - they have to keep a buffer of [[regulatory capital]] in free cash, and there are certain measures they must take to ensure they do not themselves have large exposures to other counterparties. | This risk is called credit risk. Banks are prudentially regulated to make this risk lower - they have to keep a buffer of [[regulatory capital]] in free cash, and there are certain measures they must take to ensure they do not themselves have large exposures to other counterparties. | ||
{{ | {{sa}} | ||
*[[credit risk mitigation]] | *[[credit risk mitigation]] | ||
*[[Insolvency]] | *[[Insolvency]] | ||
{{ref}} | {{ref}} |