Risk and likelihood of Default

Risk and Probability of Default

Risk and Probability of Default

Credit extension and debt creation can be traced back to ancient times. The volume and complexity of credit transactions have grown substantially with the emergence of capitalism. Credit transaction emerges whenever capital is used and savings are required. Any movement of financial capital is dependent on credit, which in turn is founded upon the lender's confidence in the borrower and borrower's reputation or credit risk. The credit risk or default risk generally refers to the probability that the borrower will default on future payments. Data as to ...