Credit Risk

Credit Risk is the risk of the default of a debt.

Every credit operation has a default risk.

A credit agreement can be unfilled by:

1. Non payment
2. Partial payment
3. Later than prearranged payment date

For the lender, it's a problem of imperfect information.

Large financial institutions, like Banks employ own models to classify it's clients.

There are companies engaged in evaluate the financial situation of governments and large companies. The biggest credit rating agencies are:

• Standard & Poor's
• Fitch
• Moody's