Kennisbank • Janneke van Schijndel, Rick Stuhmer
Banks are exposed to many types of risks. Amongst the risk spectrum, credit risk is by far the largest and most elemental risk for a bank. It broadly refers to the probability that a client cannot (fully) repay its loan(s) and the losses the bank is therefore exposed to. To ensure that banks are able to endure such losses without becoming insolvent, international regulations have been imposed with respect to minimum capital requirements for unexpected losses.