Counterparty Risk

The risk that the other party to a financial transaction fails to meet their obligation.

Counterparty risk covers banks, payment processors, lenders, and key customers. Solvency problems, sudden account freezes, or regulatory action can turn a working relationship into an unrecoverable loss overnight.

Related terms

KYC

Know Your Customer — verifying the identity of counterparties, users, and beneficial owners.

AML

Anti-Money Laundering — controls to detect and prevent illicit financial flows.

See how Scarlet Risk covers Counterparty Risk.

One platform for compliance, cyber, vendor, and world-watch risk.

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