How Can Businesses Mitigate the Risk of Credit Events?
Businesses can adopt several strategies to mitigate the risk of credit events:
- Sound Financial Management: Maintaining strong financial health through prudent financial management and budgeting. - Diversification: Diversifying revenue streams and investments to reduce dependence on any single source. - Risk Management: Implementing robust risk management frameworks to identify and mitigate potential risks. - Strong Governance: Ensuring effective corporate governance and oversight to prevent mismanagement. - Insurance: Using financial instruments like credit insurance and CDS to hedge against potential credit events.