Counterparty Risk Management

Counterparty risk management involves assessing and mitigating the risk that the other party in a financial transaction may default on their obligations, such as failing to deliver funds or securities. In the context of strategic risk management, this process ensures that a business considers these risks when making decisions, to protect its financial health and strategic goals. By evaluating the reliability of partners, suppliers, or clients, organizations can make informed choices that minimize potential losses, maintain stability, and support long-term success.