Let’s look at what else can we talk about with credit risk one thing that they referred to as credit risk which i think is more a liquidity risk is late payment so let’s say you lend someone a hundred rand and they don’t pay it back tomorrow they only pay back the following day I see that more as a liquidity risk than as a credit risk although because it’s in the sense that the person is not making the payment on time some textbooks do categorize that as a credit risk because remember what we’re going to be seeing is these risk categories aren’t perfect and there’s a lot of different ways to define them and they fit quite nicely in a bunch of different size boxes I mean another one which some people consider as a market risk and other people consider as a credit risk is a change in a credit spread

Credit spread is when you go from a triple-a rating down to say a double-a rating that reduction in your credit rating is referred to as a credit spread and that can change the effect of your your value of your bond and that’s why people say oh that’s a market risk because now your bond which they say it would have been worth 100 grand because now it’s now going to process a 90 read people say that a reduction in value is market other people would say well it’s coming from credit so you can see there is a little bit of debate different textbooks will say different things another type of risk that is classified sometimes as credit risk but other people classified is something different it’s something known as contagion or systemic risk.

Check out the best fixed rate mortgage.