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. Bank

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

    The act of giving money, property or other material goods to ...
  3. Conforming Loan Limit

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

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

    An entity that borrows more than it saves or lends out. A net ...
  6. Average Revenue Per User (ARPU)

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

    Your First Checking Account

    This owner's manual will show you what to expect from your bank.
  2. Options & Futures

    Choose To Beat The Bank

    From internet banking to credit unions, it's in your power to cut fees and maximize service.
  3. Retirement

    Getting A Loan Without Your Parents

    Use the 5 "W"s to finance your dreams without banking on a second signature.
  4. Budgeting

    How does online banking assist with budgeting?

    Setting up online banking can make a personal budget easier to manage through the use of multiple accounts or expense categories with the same financial institution (for expenses like utility ...
  5. Savings

    What US banks offer the best savings accounts?

    Explore the best savings accounts offered by national banks comparing annual yield and other factors. Learn why the highest-yield accounts are offered online.
  6. Savings

    What Canadian banks offer the best savings accounts?

    Learn about different savings accounts in Canada. Explore different interest rates and fees as well as accounts that are protected by the CDIC.
  7. Budgeting

    What US banks offer free checking accounts?

    Quit wasting money on monthly fees associated with your checking account and get a free checking account from reputable national banks.
  8. Investing Basics

    The 10 Biggest Latin American Banks

    Brazil is home to most of the major banks in Latin America, claiming six of the ten largest financial institutions in the region.
  9. Investing Basics

    What's the Role of an Investment Bank?

    Investment banks provide financial advice to businesses and governments and help them raise capital through the sale of stocks, bonds and other products.
  10. Investing Basics

    The World's Top 10 Investment Banks

    These banks come out on top as measured by revenue numbers, global reach, employee headcount, income, and a number of other factors.

You May Also Like

Hot Definitions
  1. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  2. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  3. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  4. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  5. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  6. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
Trading Center