Credit Limit

From Open Risk Manual

Definition

Credit Limit denotes a quantitative threshold (ceiling) to the amount of credit that can be extended to any particular entity. It is a form of Risk Limit. Hierarchical credit limits figure in an organizations Credit Decisioning structure

Credit Limit Matrix

In practical circumstances credit limits might be set according to schedules, matrices or other schemes that link the amount of the credit limit to observable variables pertaining to the borrower (or other market conditions).

Examples

See Also


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