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Credit Risk
Credit risk is the possibility that a borrower or other party will fail to meet financial commitments as agreed.
Credit risk is the possibility that a borrower or other party will be unable to meet financial commitments as agreed. It concerns financial performance, while other risk categories address different sources of loss or disruption.
Property operations example: describe the financial commitment and the evidence supporting a risk-register entry. Keep a possible future payment failure distinct from an already documented missed payment.
Source: FDIC, Consumer Compliance Examination Manual, Third Party Risk, Credit Risk.
Frequently Asked Questions
Is credit risk the same as a confirmed default?
No. Risk describes a possibility. A confirmed payment failure is an observed event requiring supporting records and its own assessment.
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