Glossary
Plain-English definitions used in Cork lending-vault assessments.
Loss and ratingsLink to this section: Loss and ratings
P(loss). The probability that the vault finishes the assessment period above the permanent-loss threshold.
Expected loss. Average loss across all simulation paths.
Conditional loss. Average loss among paths that cross the loss threshold.
Percentile loss. A loss level that a stated share of paths stay at or below.
Tail loss. Average loss among the most severe paths in the selected tail.
Loss-adjusted yield. Comparable net yield minus expected loss over the same period and in the same unit.
Permanent-impairment eventLink to this section: Permanent-impairment event
Permanent-impairment event. More than one percent of value permanently lost at the one-year horizon. For a vault, the measure is terminal net asset value drawdown against vault value. For a collateral asset, the measure is its value against its economic reference. A price move that recovers before the horizon is not an impairment.
Lending and recoveryLink to this section: Lending and recovery
Lending vault. A vault that supplies depositor assets to collateralized lending markets.
Collateral. The asset a borrower pledges against a loan.
Liquidation threshold. The point where the lending protocol allows a borrower position to be liquidated.
Liquidation incentive. Extra collateral offered to compensate a liquidator for repaying debt.
Bad debt. Borrower debt left unpaid after liquidation and collateral recovery.
Recovery fraction. The share of debt repaid from seized collateral after fees and execution costs.
Market recovery. Sale of seized collateral through an exchange or aggregator.
Mechanism recovery. Use of redemption, withdrawal, or settlement before the final conversion into the loan asset.
Principal token. A claim that settles into an underlying asset at a stated maturity.
Evidence and modelLink to this section: Evidence and model
Evidence cutoff. The latest time admitted evidence may have been observed for a run.
Policy prior. A named assumption used for a risk channel with limited direct measurement.
Simulation path. One possible evolution of assets, borrowers, liquidation, and recovery across the assessment period.
Shared dependency. One asset, issuer, bridge, custodian, price provider, or mechanism used by more than one exposure.
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