counterparty
Sign in to saveAlso known as contraparty, opposite party, counter-party
A counterparty (sometimes contraparty) is a legal entity, unincorporated entity, or collection of entities to which an exposure of financial risk may exist. The word became widely used in the 1980s, particularly at the time of the Basel I deliberations in 1988.
Wikidata facts
- Subclass of
- opposite
Show 2 more facts
- facet of
- financial risk
- described at URL
- www.investopedia.com/terms/c/counterparty.asp
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Encyclopedic overview
3 sectionsContents
- Financial services sector
- Insurance sector
- References
A counterparty (sometimes contraparty) is a legal entity, unincorporated entity, or collection of entities to which an exposure of financial risk may exist. The word became widely used in the 1980s, particularly at the time of the Basel I deliberations in 1988.
Well-drafted contracts usually attempt to spell out in explicit detail what each counterparty's rights and obligations are in every conceivable circumstance, though there are limits. There are general provisions for how counterparties are treated under the law, and (at least in common law legal systems) there are many legal precedents that shape the common law.
Excerpted from Wikipedia’s “counterparty” article, available under the CC BY-SA 4.0 licence.