Counterparty Risk

"The primary thing our investors have been trying to understand is counterparty risk, " said the head of one large London fund.

Rather than lending directly to borrowers, all the trades are cleared through a central platform, which reduces counterparty risk.

Another reason is counterparty risk, the fear of being on the other side of a transaction with a failed bank.

The amount of counterparty risk in the system will be reduced greatly by central clearing-houses for credit-default swaps.

The problems are exacerbated by the demise of the securitisation market, and fears about counterparty risk.

The financial infrastructure also has important effects on how market participants respond to perceived changes in counterparty risk.

Some products meant to limit risk bury it in complexity, or just transform it into counterparty risk or systemic risk instead.

The aim is to prevent the default of one market participant from spreading "counterparty risk" throughout the financial system.

Fears of counterparty risk -- that a borrower might default or collapse without paying off its debts -- spread across the globe.

The slim margin for error means confidence could still evaporate, with even good banks dragged down by counterparty risk.

Counterparty risk is reduced since all parties work through the same clearing mechanism.

To be fair, totting up counterparty risk is not easy.

Moreover, these deals have trapped banks and other financial players in a complex web of counterparty risk.

This may seem like a good idea when counterparty risk is low, but that can change abruptly and dramatically.

The transfer of wholesale market counterparty risk from the market to the taxpayer is the central issue.

One clear problem is counterparty risk; insurance is worth nothing if the insurer cannot pay up.

And if neither EU banks nor the ECB can secure enough needed dollars in global markets, there is a serious counterparty risk to the Fed.

As a result, counterparty risk is up, and the market is not functioning smoothly.

That risk remains, judging by CDR's counterparty-risk index, which measures the health of CDS dealers (see chart 1).

Theslim margin for error means confidence could still evaporate, with even good banksdraggeddown by counterparty risk.

Credit risk: The risk that a debt issuer may default on payments. Also called counterparty risk.

You should also understand that we get paid up-front when we enter into the contracts and therefore run no counterparty risk.

Central Banks feared counterparty risk for the first time in 20 years and substantially curtailed gold lending and sales.

Gold is "a currency that can't default. It doesn't have any counterparty risk. It's universal money, " says Larkin.

Few financial economists thought much about illiquidity or counterparty risk, for instance, because their standard models ignore it;

Credit Derivatives Research has devised a counterparty-risk index, based on the cost of insuring against default of 15 large banks;