0 a calculation of how likely it is that a person or company will not be able to pay back money they have borrowed from a bank or other organization:
1 the degree to which it is possible that a person, company, or government will not be able to pay back borrowed money:
2 a person, company, or government considered according to how likely they are to pay back borrowed money:
3 a person, company, or government that is unlikely to pay back borrowed money:
There is an inherent conflict of interest if market participants devise internal credit risk assessments for their own regulatory capital requirements.
A comparative anatomy of credit risk models.
The same problem creates a credit risk that limits the supply of debt and it would be more realistic to suppose that debt was simply unavailable past a certain age.
The present work aims to investigate the effect of increasing the strength of the dependence between systematic factors on the default indicators in standard credit risk models.
Second, the use of credit ratings in financial and other regulations permits policymakers to distance themselves from domestic political fallout when the regulation of credit risk goes awry.
The agencies created a new way to talk about credit risk.
The two kinds of enhancements proposed differ materially in this respect according to who bears the credit risk.
Removal of ratings would force regulators to arrive at some alternative measure of credit risk through the typical rule-making process.