In this article, we re-emphasise the need for treasurers to keep on top of counterparty risks, examining both existing and emerging threats. It’s a multi-faceted threat that is constantly changing and evolving. This is all well and good on paper, but as any treasurer knows, counterparty risk is far more nuanced in reality.
The higher the odds of a default are, the higher the level of counterparty risk. In simple terms, counterparty risk is defined as the possibility that someone you do business with will be unable to meet their obligations to you.