# Herstatt risk (principal risk)

- Canonical URL: https://www.gerhardmerk.de/herstatt-risk-principal-risk
- Post ID: 594527
- Modified: 2023-07-25T21:02:13+00:00
- Language: en

## Definition

The risk that, in a foreign exchange transaction, one party will pay out the currency it has sold - in this case: DEM - is paid out. However, the contracting party is not in a position to deliver the purchased currency - in this case: USD - also to deliver (the danger of loss in foreign exchange trading that one party will deliver foreign exchange but the counterparty will fail to bring its end of the contract). - See foreign exchange forward, settlement risk, Herstatt default, matching, quanto, rollover risk, swap transaction, Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

## Machine-readable

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