counterparty
A counterparty is an individual or organization willing to assume risk in a capital market transaction such as a catastrophe bond.
counterparty
A counterparty is an individual or organization willing to assume risk in a capital market transaction such as a catastrophe bond.
Additional Information
For every seller of a marketable security, there must be a buyer, a counterparty. When risk is offloaded in the capital markets, it must be picked up by a counterparty willing to assume the risk. Because of the need for noncorrelating high-risk positions in diversified investment portfolios, risk-taking counterparties exist.
