PCE vs PFE

JordanWindebank · July 26th, 2011, 10:55 pm

Hi all,A question has been asked recently that I can't answer so I am turning to the experts. Is there a difference in the meaning of PCE (Potential Credit Exposure) vs PFE (Potential Future Exposure) or are the two used interchangeably?Within my organisation we refer to credit risk exposure as PCE but I have not seen this term used in texts anywhere so want to ensure it does in fact have the same meaning as PFE.Thanks,Jordan

tags · July 27th, 2011, 5:18 pm

my 2-centthe Basel accord distinguishes between CCE (Current Credit Exposure) and PFE (Potential Future Exposure).isn't the Potentiel Credit Exposure in the company you work with actually the Basel CCE ?

Qmartingale · August 1st, 2011, 1:22 pm

PFE which is -ve number carries no credit risk and is of least worry from credit risk perspective.CCE may be -ve number and is always looked on as today's number.PFE may be -ve and may be similar to CCE on Day 0 today but may turn/explode to big + ve number in next tenor buckets( maybe 90d,365d tenor bucket) whereas there is no tenor bucketing concept for CCE/Current exposure.Regards,