CREDIT RISK
Also known as default risk. In broad terms, the risk that a loss will be incurred if a counterparty to a (derivatives) transaction does not fulfil its financial obligations in a timely manner. The term is sometimes loosely used as shorthand for the likelihood or probability of default, irrespective of the value of any position exposed to this risk. More precisely, credit risk is the risk of financial loss arising out of holding a particular contract or portfolio.