The Law Dictionary

Featuring Black’s Law Dictionary Free Online Legal Dictionary 2nd Ed.

What is EXPECTED CREDIT LOSS

An average, or mathematically expected, credit loss, generally determined through a combination of expected CREDIT RISK exposure, probability of DEFAULT, and anticipated RECOVERY IN DEFAULT. Financial institutions allocate CREDIT RESERVES in support of expected credit losses. See also UNEXPECTED CREDIT LOSS, WORST CASE CREDIT LOSS.

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