What is meant by off-balance sheet activity

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Understanding the structure of commercial banks and the services/products that they provide is essential for the successful leadership of any commercial enterprise. While fundamental knowledge of the industry as a whole is important, it is equally crucial to assess the risk profile of counter-parties to ensure that appropriate steps have been taken to mitigate this risk as much as possible.

  1. What is meant by off-balance sheet activity?
  2. What specific types of off-balance-sheet items would you expect for commercial banks?
  3. How does an off-balance-sheet item move onto the balance sheet?
  4. How do you assess the risk of off-balance-sheet items?

Reference no: EM133233444

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