However the major risks faced by cash managers are default risk and liquidity risk. Term risk, which describes the probability that a credit spread will widen during the life of a security, is a contributor to these two. While there is much liquidity risk in the domestic market at the moment, term risk has also rattled managers as spreads on some AAA-rated residential mortgage-backed securities have widened from below 20 to well over 100 basis points, Korber says.