Counterparty Risk:
The risk that the other party in an agreement will default. In an option contract, the risk to the option buyer that the writer will not buy or sell the underlying as agreed.
April 05, 2008
HousingPANIC Definition of the Day - "counterparty risk"
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how bad do you think it will get?
Nov. 17 (Bloomberg) -- The use of derivatives grew at the fastest pace in eight years during the first half of 2006, boosting earnings at securities firms and reducing costs for investors.
The face value of derivatives based on corporate bonds, currencies, interest rates, commodities and stocks jumped 24 percent to $370 trillion, according to the Bank for International Settlements. It was the biggest percentage rise since the bank began keeping records in 1998.
http://immobilienblasen.blogspot.com/2006/11/derivatives-trading-soars-to-370.html
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