Basics
What is counterparty risk?
Updated 2026-06
Counterparty risk is the risk that the other party in a deal does not do what they agreed, for example a supplier that cannot deliver or a customer that does not pay. Checking and monitoring the entity is how you manage it.
Key facts
- It applies to suppliers, customers, partners and lenders.
- Confirming the entity and its standing lowers the risk.
- Monitoring catches a change before it becomes your problem.
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