What is 'primary-risk-reducing effect' in SAP IS-B-RA-CL - Default Risk and Limit System?

primary-risk-reducing effect - Overview

• Component: IS-B-RA-CL

• Component Name: Default Risk and Limit System

• Description: Defines which value of a security is to be used to reduce the primary exposure.

primary-risk-reducing effect - Details

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  Key Concepts: 
  Primary-risk-reducing effect is a feature of the IS-B-RA-CL Default Risk and Limit System in SAP. It is a risk management tool that helps to reduce the risk of default by setting limits on the amount of credit that can be extended to customers. The primary-risk-reducing effect works by automatically reducing the amount of credit that can be extended to customers when their creditworthiness decreases. 
  
  How to use it: 
  The primary-risk-reducing effect can be used to manage risk in SAP by setting limits on the amount of credit that can be extended to customers. The system will automatically reduce the amount of credit that can be extended to customers when their creditworthiness decreases. This helps to reduce the risk of default and ensure that only customers with good creditworthiness are able to access credit. 
  
  Tips & Tricks: 
  It is important to regularly review the limits set on customer credit in order to ensure that they are appropriate for the customer’s current creditworthiness. This will help to ensure that only customers with good creditworthiness are able to access credit and reduce the risk of default. 
  
  Related Information: 
  The IS-B-RA-CL Default Risk and Limit System in SAP also includes other features such as automatic limit adjustments, customer segmentation, and customer scoring. These features can also be used to help manage risk and reduce the risk of