Credit exposure

Credit exposure,

Definition of Credit exposure:

  1. 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.

  2. Alternative term for credit risk.

  3. 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?

  1. It indicates the maximum loss to a lender if a borrower defaults on a loan.
  2. The credit rating system was created to help lenders control credit exposure.
  3. Credit exposure is one component of credit risk.

Meaning of Credit exposure & Credit exposure Definition