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Phil Nguyen
Phil Nguyen
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What are the difference between "settlement risk" and "default"counterparty risk"

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Phil Nguyen
Phil Nguyen
  • 1.2k
  • 4
  • 10
  • 31

What are the difference between "settlement risk" and "default risk"

From Lannquist,2020, p.6, the wholesale Central Bank Digital Currency (CBDC) could reduce settlement risk and counterparty risks.

I am wondering what is the intuitive difference between these two risks? From Investopedia( here, here) , these two terms are indistinguishable to me, mostly about default risk.