A counterparty credit report assesses the creditworthiness of a party involved in a financial transaction. It evaluates the risk that the counterparty may default on its obligations, potentially causing financial loss to the other party. This report is crucial for managing counterparty credit risk, especially in trading, derivatives, and securities markets. By analysing the counterparty’s financial health, credit history, and market behaviour, institutions can make informed decisions to mitigate potential risks.