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.
To understand the risk associated with corporate banking activities more, prepare a written response to the following questions:
- What is meant by off-balance sheet activity?
- What specific types of off-balance-sheet items would you expect for commercial banks?
- How does an off-balance-sheet item move onto the balance sheet?
- How do you assess the risk of off-balance-sheet items?
Your response must adhere to the following standards:
- Be 2-4 pages in length, excluding the title or reference pages.
- Cite at least 2 sources properly using the textbook and academic references
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