# Transfer risks (intermediary risks; translation risks)

- Canonical URL: https://www.gerhardmerk.de/transfer-risks-intermediary-risks-translation-risks-2
- Post ID: 7851
- Modified: 2023-07-25T21:14:08+00:00
- Language: en

## Definition

In the case of loans by a bank to foreign currency areas, the possibility that - servicing (interest and repayment) in freely convertible currency is prohibited by political authorities or even - the debt is not recognized by a new government (odious public debt). - Risks arising in connection with credit derivatives, primarily at intermediary banks. These include, in particular, - underlying mismatch risk: two offsetting hedging transactions are not fully congruent, for example: they do not relate to similar reference assets, - counterparty risk: the protection seller is economically unable to perform as agreed, - legal risk: the assessment of a transaction as the occurrence of a credit event is disputed between the protection seller and the protection buyer, and - operational risk: the organizational (organizational: personnel, technical) infrastructure fails. - The possibility of a loss due to the fact that items valued in foreign currency are included in the balance sheet (possible loss from the conversion of foreign currency items on the balance sheet; these foreign exchange fluctuations are not offset by balance sheet items in the same currency). - Sometimes also said with regard to possible losses due to interruption of IT technology. i.e. for technology risks. - See information assurance, IT risks, country risk, risk, systemic sovereign debt, denied, securities, risk-free, technology risks, videoconference. - Cf. Deutsche Bundesbank Monthly Report, April 2004, p. 38. 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/

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