Country Limit

AAA

DEFINITION of 'Country Limit'

The aggregate limit that a bank places on all borrowers in a given foreign country. Country limits typically apply to all borrowers, regardless of whether they are public or private, individual or institutional. The creditworthiness of the borrower and the unit of currency involved are also irrelevant for the purposes of this restriction.

INVESTOPEDIA EXPLAINS 'Country Limit'

Country limits are set by banks as a means of limiting their lending risk. Similar to diversifying a stock portfolio, banks use country limits to diversify their loan portfolios and lower risk. Political unrest in a foreign country may result in loan default, regardless of the stability of the borrower. Therefore, many different criteria must be assessed when setting this limit.

RELATED TERMS
  1. Conforming Loan Limit

    The limit on the size of a mortgage which Fannie Mae and Freddie ...
  2. Maximum Loan Amount

    Describes the maximum amount that a borrower can borrow. The ...
  3. Net Borrower

    An entity that borrows more than it saves or lends out. A net ...
  4. Bank

    A financial institution licensed as a receiver of deposits. There ...
  5. Loan

    The act of giving money, property or other material goods to ...
  6. Average Revenue Per User (ARPU)

    A measure of how much income a business generates, given the ...
Related Articles
  1. Your First Checking Account
    Insurance

    Your First Checking Account

  2. Choose To Beat The Bank
    Options & Futures

    Choose To Beat The Bank

  3. Getting A Loan Without Your Parents
    Retirement

    Getting A Loan Without Your Parents

  4. How does online banking assist with ...
    Budgeting

    How does online banking assist with ...

comments powered by Disqus
Hot Definitions
  1. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  2. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  3. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  4. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  5. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  6. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
Trading Center