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Finance & Banking vocabulary · Risk Management

Exposure

Meaning in finance & banking, with examples

/ɪkˈspoʊʒər/nounCommon term

In finance & banking, exposure means: The amount of money a bank could lose to a particular borrower, sector, country or market if things go wrong.

In Turkish: risk tutarı, maruz kalınan risk, risk

How it is used

Used in credit and risk reports: exposure to a client, a sector or a currency. Banks limit, reduce or hedge exposures, and large exposures are subject to special rules. Exposure at default (EAD) is a key risk measure.

Example sentences

  1. Our total exposure to the tourism sector is about 8 percent of the loan book.

  2. We are reducing our exposure to companies with high foreign currency debt.

Common collocations

  • exposure to
  • credit exposure
  • reduce exposure
  • large exposures
  • currency exposure
  • credit riskThe risk that a borrower or another party will not pay back money it owes on time or in full, causing a loss for the lender.
  • market riskThe risk of losses caused by changes in market prices, such as interest rates, exchange rates, share prices and commodity prices.
  • hedgeTo reduce the risk of losing money from changes in prices, interest rates or exchange rates, usually by taking an opposite position with derivatives.
  • collateralAn asset, such as property, cash or securities, that a borrower pledges to a lender and that the lender can sell if the loan is not repaid.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Risk Management

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This page explains English vocabulary for learners. It is not financial advice.