Definition of counterparty in English:
An opposite party in a contract or financial transaction.
- The purpose is to have mutuality between each member and the clearing house for set-off purposes: otherwise two separate banks contracting with a defaulting counterparty could not set off their individual losses and gains.
- Among those financial institutions exposed to Enterprise A are derivatives counterparties whose contracts with the Enterprise have a positive market value.
- A client may well wish to discuss advice received with a partner, or with another adviser, or with a contractual counterparty who might be affected.
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