What is 'maximum exposure' in SAP IS-B-RA-CL - Default Risk and Limit System?

maximum exposure - Overview

• Component: IS-B-RA-CL

• Component Name: Default Risk and Limit System

• Description: Volume-oriented attributable amount derived from the maximum of the external commitment and the utilization.

maximum exposure - Details

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  Key Concepts: 
  Maximum exposure is a concept used in the IS-B-RA-CL Default Risk and Limit System of SAP. It is the maximum amount of risk that a company is willing to take on a particular transaction or activity. It is calculated by taking into account the potential losses that could occur if the transaction or activity fails. 
  
  How to use it: 
  The maximum exposure concept is used to set limits on the amount of risk that a company is willing to take on a particular transaction or activity. This limit can be set by the company itself or by an external party such as a regulator. The limit should be set based on the potential losses that could occur if the transaction or activity fails. 
  
  Tips & Tricks: 
  When setting maximum exposure limits, it is important to consider all potential risks associated with the transaction or activity. This includes both direct and indirect risks, such as market volatility, credit risk, and operational risk. It is also important to consider the impact of any changes in market conditions on the potential losses associated with the transaction or activity. 
  
  Related Information: 
  The IS-B-RA-CL Default Risk and Limit System of SAP also includes other concepts such as credit limit, collateral, and counterparty risk. These concepts are used to further manage and control risk associated with transactions and activities.