Definition of Credit exposure:
Credit exposure is a measurement of the maximum potential loss to a lender if the borrower defaults on payment. It is a calculated risk to doing business as a bank.
Alternative term for credit risk.
For example, if a bank has made a number of short-term and long-term loans totaling $100 million to a company, its credit exposure to that business is $100 million.
How to use Credit exposure in a sentence?
- It indicates the maximum loss to a lender if a borrower defaults on a loan.
- The credit rating system was created to help lenders control credit exposure.
- Credit exposure is one component of credit risk.
Meaning of Credit exposure & Credit exposure Definition