Defaulter pays is a risk-management approach in which a participant is responsible for ensuring that its failure does not impose an unfunded loss on others. Protection such as margin, guarantees, or contributions is arranged in advance to meet liabilities attributable to that participant, limiting the need for the wider group to absorb the shortfall.
Passende Formel
Source: European Central Bank (ECB) (source). This glossary entry is an independently worded adaptation of the cited information.