The credit risk
Example: Credit risk measures likelihood of borrower failing to repay debt
Definition
"The credit risk" refers to the possibility that a borrower will fail to repay a loan or meet contractual debt obligations, causing financial loss to the lender. It is a key concept in finance used to assess the likelihood of default and manage lending decisions.
Etymology
The term "credit risk" combines "credit," derived from the Latin 'creditum,' meaning 'a loan' or 'thing entrusted to another,' and "risk," from the Italian 'risco,' meaning 'danger' or 'hazard.' Together, they describe the potential danger inherent in lending money or extending credit.
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"The credit risk" appears in the Vocaplus list "English - Finance - (A1-C2) - set 1", containing 150 commonly used words.
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