Definitions for "Capital Risk"
Keywords:  bargain, herstatt, uphold, risk, lose
Risk where banks have to deal with another bank or financial institution who may not be able to uphold its side of the bargain.
A form of investment risk that the investor may lose all or part of the capital (principal) invested.
The risk arising from a bank having to pay to the counter party with out knowing whether the other party will or is able to meet its side of the bargain. see Herstatt.