Wrong-way risk

Japanese

誤方向リスク

Last reviewed

September 26, 2026

This is a draft, shown for review before publication.

Wrong-way risk is the risk that the exposure to a counterparty grows at the same time as the counterparty's creditworthiness declines. It is sometimes divided into general wrong-way risk, where the counterparty's probability of default moves with market-wide factors, and specific wrong-way risk, where the probability of default and the exposure to a particular counterparty rise together.