Risk
What is Counterparty Risk?
The risk that the other side of a deal can't hold up their end
Full Explanation
Counterparty risk is the chance that whoever you're doing a financial deal with defaults or fails. It's why people worried about banks during 2008 — if your bank fails, your money is at risk.
Pro Tip
FDIC insurance covers up to $250,000 per account. Above that, counterparty risk is real.
Related Risk Terms
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