Counterparty Credit Risk: The Desk Meant to See the Whole Client
Prime brokerage ends with five banks unable to see each other's exposure to the same client.
Prime brokerage ends with five banks unable to see each other's exposure to the same client. Counterparty Credit Risk is the function built to solve the version of that problem inside one bank — a single, consolidated view of everything one client owes across every desk it touches. At Credit Suisse, on Archegos, that function existed, had already flagged the client as a concern a year earlier, and still failed to stop the loss. What Potential Future Exposure and CVA actually measure, why a bilateral swap carries this risk at all when a cleared trade doesn't, how RBI's Large Exposures Framework strips banks of the discretion that failed at Credit Suisse, and what an independent report into that failure actually found — with paired Indian and global examples throughout.
Surya · 11 min read