What is counterparty/issuer risk in SAP IS-B-RA-CL - Default Risk and Limit System?

SAP Term: counterparty/issuer risk

• Component: IS-B-RA-CL

• Component Name: Default Risk and Limit System

• Description: Risk of an unexpected loss in the value of a receivable in a contract due to a worsening of the credit standing of a business partner.

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• Key Concepts: 
  Counterparty/Issuer Risk is a risk management system within the SAP IS-B-RA-CL Default Risk and Limit System. It is used to identify and manage the risk associated with counterparties and issuers. This system allows users to set up risk profiles for each counterparty or issuer, which can be used to monitor and manage their exposure to risk. 
  
  How to use it: 
  The Counterparty/Issuer Risk system can be used to set up risk profiles for each counterparty or issuer. These profiles can be used to monitor and manage their exposure to risk. The system also allows users to set up limits on the amount of exposure they are willing to accept from each counterparty or issuer. 
  
  Tips & Tricks: 
  It is important to regularly review and update the risk profiles for each counterparty or issuer in order to ensure that they are accurately reflecting the current risk levels. Additionally, it is important to ensure that the limits set for each counterparty or issuer are appropriate for the level of risk they pose. 
  
  Related Information: 
  The Counterparty/Issuer Risk system is part of the SAP IS-B-RA-CL Default Risk and Limit System, which also includes other features such as credit limit management, collateral management, and portfolio management. Additionally, there are other SAP systems that can be used for managing counterparty/issuer risk, such as SAP Credit Management and SAP Credit Risk Management.