BEO2000 Lecture Notes - Lecture 8: Contingent Liability, Asset, Revolving Credit
31 Jul 2021
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Lecture 8: commercial banks: off-balance sheet activities and performance: beo2000 financial institutions & monetary theory, primary sources, kidwell et al. 562-568: beets , s. 2004, the use of derivatives to manage interest rate risk in commercial banks, pp. Learning outcomes: explain the various off-balance sheet activities of commercial banks, with respect to learning outcomes, you should be able to, b. Identify the main derivative securities used by commercial banks: off-balance-sheet (obs) activities, obs transactions are a significant part of a bank"s business, examine commercial bank performance and profitability. Obs items generate fee income for the bank but also increases bank risk. Obs items are contingent assets or liabilities. Contingent asset: a possible asset that may arise because of a gain that is contingent on future events that are not under an entity"s control. Contingent liability: a potential liability that may occur, depending on the outcome of an uncertain future event.
