What is Credit Risk? Credit risk is when a lender lends money to a borrower but may not be paid back. Loans are extended to borrowers based on the business or the individual’s ability to service future payment obligations (of principal and interest). Lenders go to great lengths to understand a borrower’s financial health and…
What are the Main Types of Cryptocurrencies? Presently, there are thousands of cryptocurrencies out there, with many more being started daily. While they all rely on the same premise of a consensus-based, decentralized, and immutable ledger in order to transfer value digitally between trustless parties, there are subtle and not-so-subtle differences between them. This article…
Is Cryptocurrency a Good Investment? With trillions of dollars invested and all the hype in cryptocurrencies and new crypto projects being rolled out daily, the question that many investors are asking themselves is whether cryptocurrencies are a good investment. Despite investors losing most, if not all, of their investment in scams like the Squid Game…
What is LTV (Loan-to-Value)? LTV represents the proportion of an asset’s value that a lender is willing to provide debt financing against. It’s usually expressed as a percentage. LTVs tend to be higher for assets that are considered more “desirable” as collateral. The desirability of an asset as collateral is generally measured by how stable…
What is Venture Capital? Venture capital is a type of private equity investing that involves investment in earlier-stage businesses that require capital. In return, the investor will receive an equity stake in the business in the form of shares. Companies that raise venture capital do so for a variety of reasons, including to scale the…
What is LGD (Loss Given Default)? LGD (Loss Given Default) is a lender’s (creditor) ‘s projected loss in the event that a borrower triggers an event of default. LGD is a measure used by financial institutions and other private, non-bank lenders to help calculate the projected profitability of a loan (often referred to as a credit…
How to Trade Cryptocurrency The invention of Bitcoin, Ethereum, and other cryptocurrencies has ushered in a new asset class that has proven lucrative for many traders. Firstly, we need to make the distinction between investing and trading—the biggest difference being the time horizon. With trading in any asset, the time horizon tends to be short-term…
What Impact Does Cryptocurrency Have on the Environment? One of the most common criticisms of cryptocurrency is its negative impact on the environment. Some critics have also used this criticism to cast the entire Decentralized Finance (DeFI) space in a negative light. While it is true that we cannot ignore the negative environmental impact associated…
What is BNPL (Buy Now, Pay Later)? BNPL (Buy Now, Pay Later) is unsecured consumer credit and an increasingly popular fintech-enabled payment option, most commonly offered on e-commerce platforms. The history of BNPL traces back to the installment plan – a way to pay for large purchases over time by spreading it over a number…
What is Financial Crime Risk Management? Financial crime risk management is the practice of actively attempting to identify and prevent financial crime. It is done by identifying suspicious activity and vulnerabilities that an organization possesses in order to mitigate the impact of financial crime. There are various tools that can assist with financial crime risk…
