loss-sharing rule

What is loss-sharing rule?

loss-sharing rule definition and meaning on Finance terms:
The rule or formula stipulating the way in which losses arising from the default of either a participant in the system or the system itself are to be shared among the various parties in the event that a loss-sharing agreement is activated. <

 

reference: https://www.ecb.europa.eu/home/glossary/html/index.en.html

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