All terms RiskStart here

Counterparty

A counterparty is another person or organization involved in a financial transaction, contract or agreement. Depending on the investment, counterparties might include borrowers, issuers, banks, custodians, brokers or trading partners.

Why it matters to you

Understanding an RWA often requires asking: Who am I relying on? A product can involve several counterparties, each responsible for a different part of the structure. A weakness in any important counterparty can create risk for investors.

Terms that sit next to this one

Counterparty Risk
Issuer
Custodian
Settlement Risk

Borrower

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