Counterparty Risk & Decision Model

Before committing money, goods or information, quantify what you can lose and which controls genuinely reduce exposure.

ET-002 V2 integrates qualitative screening, economic exposure, expected loss, maximum plausible loss, controls, residual risk and decision in one auditable workflow.

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Editable XLSX model with seven connected worksheets.

When to use itBefore committing resources or accepting a difficult-to-reverse exposure.

What to prepareExposure, evidence, probabilities, recoveries, controls, owners, limits and alternatives.

What you will obtainAn evidence-based recommendation: accept, condition, renegotiate, escalate or reject.

What problem it helps solve

Assess identity, financial capacity, compliance, operating capability and payment exposure before accepting counterparty risk.

Questions to answer

Is the entity validly incorporated and active?
Who owns and controls the counterparty?
Can it meet payment and performance obligations?
Does performance history support reliability?
Is there sanctions, litigation or regulatory exposure?
Can it deliver the agreed scope and volume?

How the result is interpreted

The 0–100 result is calculated from confirmed rows. Completeness is shown separately so that form completion is not confused with decision quality.

What it does not replace

The tool does not replace legal, financial, tax, technical or regulatory verification when specialist review is required.

Within the framework

Diagnose and decide

This tool forms part of the MGS Strategic Intelligence Framework™. The MGS Decision Framework™ is the decision sub-method used within the Diagnose, Prioritise and Decide phases.

Review methodology criteria, scoring and limitations.

Next step

When the tool identifies material exposure

Convert material gaps into a decision question, a verifiable scope and an expected outcome.

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