Risk of loss

Expression for the probability with which the assets of an investor – for example: 100 EUR – fall below a certain value (threshold value) after a certain time – for example: 24 months. – The default risk is usually highest for a stock portfolio; for a savings account, the default risk is zero percent because the savings interest rate is always positive under normal circumstances. – In a contractual relationship, the risk that the counterparty will default on an obligation, sometimes called counterparty risk. – See bond spread, credit risk, credit extension, group of connected customers, nodal point, credit, short-term, negative interest rate, renationalization, loss rate. – Cf. ECB Monthly Bulletin, January 2005, p. 56 f., BaFin Annual Report 2006, p. 70 (obligation of institutions to determine default risk).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
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