Measure of a bank’s expected average loss per exposure in the event of default by a specific counterparty. This arises when the proceeds from – the payments made by a borrower to date and – the liquidation of collateral and – any guarantees or sureties are insufficient to cover the liabilities. – In 2007, 6.35 percent of loans were not serviced in the United States and 1.33 percent in Spain. – See default rate, expected, default, confidence level, liquidity management, risk, delinquency rate, debt, nonperforming, value at risk, loss rate, delinquency.
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