The risk add-on (risk premium) on a bank’s loans, which depends on the creditworthiness of the respective borrower and is measured in rating classes. An increase in the premium indicates that the risk has already materialized or is expected to materialize.
losses from the lending business. – See credit quality category, credit risk, spread of conditions, risk adjustment. – ECB Monthly Bulletin, December 2008, p. 76 (increase in premiums in view of the financial crisis; implications).
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