Wrong-way risk is defined as the risk that the exposure to a counterparty is adversely correlated with the credit quality of that counterparty. In other words, it is the risk that occurs when the exposure to a counterparty increases while the probability of default of the counterparty also increases.

• Concentration risk is the risk of loss from a large, concentrated exposure to a single entity or a group of related counterparties.
• Settlement risk is the risk that a counterparty will fail to deliver a security or its cash value as per the agreement when the other party has already delivered.
• Credit migration risk is the risk of a decline in a counterparty's credit rating.