Credit risk is the risk that your counterparty might default on future obligations. There are a small number of credit rating agencies operating globally that assign a credit rating to each company under consideration. ‘Credit risk’ explains credit risk modelling and analysis, including credit default swaps, multi-asset credit risk, and collateralized debt obligations. Credit risk models are divided into two main categories: ‘structural form’ and ‘reduced form’. A pervasive problem in credit risk modelling is that while some parameters can be backed out by the calibration process, there are usually others about which the available data is insufficient for us to do anything more than take an educated guess.