What is the difference between risk and uncertainty?

What is the difference between counterparty risk and settlement risk?

• The definitions I find on the Internet sound very similar: Counterparty risk: The risk to each party of a contract that the counterparty will not live up to its contractual obligations. Settlement risk: The risk that one party will fail to deliver the terms of a contract with another party at the time of settlement. Settlement risk can be the risk associated with default at settlement and any timing differences in settlement between the two parties.

• Answer:

  I suppose they should be the same. If the counterparty is not trustworthy, then it'll avoid settlement. With a central clearing house in place that mark-to-market contracts daily, the settlement risk will be close to nil even if you were dealing with a counterparty with serious counterparty risk. But that does not mean the counterparty risk is not present. It's just that the settlement risk associated with the counterparty risk is offset by the need to mark-to-market daily the contract. The counterparty may default, but the loss from the default will be minimized. From your side of the trade, there may be no settlement risk at all since the central clearing house is guaranteeing the settlement.