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Risk-Weighted Assets

Assets which are adjusted to relevant risks by multiplying their values by the proper risk weights. Risk-weighted assets (RWAs) measure...

Stress Testing

A risk management technique that is used to estimate how a company’s portfolio would have performed under some of the...

Accounting Risk

The risk that arises when financial statements do not reflect a true and fair view of an entity's financial position...

Risk-Controlled Arbitrage

An asset-based complex risk management strategy that is usually implemented by some savings institutions (thrifts, savings and loan institutions (S&Ls))....

Soft Risk

A threat or opportunity that is by nature not quantifiable or cannot be quantified using typical risk management tools and...

Intangible Risk

A threat or opportunity that is by nature not quantifiable or cannot be quantified using typical risk management tools and...

Other Side of the Coin Risk

Another term denoting wrong-way risk; the risk that arises when a counterparty risk is adversely correlated with the credit quality...

Netting

A contractual clause that is included in over-the-counter derivatives contracts in order to mitigate credit risk. It states that, if...

Neutral Hedge

A hedge that is designed to neutralize connection to market forces. It is a combination of market risk offsetting positions...

Credit Risk

The risk (danger of financial loss) that arises from the possibility that borrowers in ordinary business dealings and counterparties in...