10 - Off-balance-sheet exposures and derivatives  pp. 351-371

Off-balance-sheet exposures and derivatives

By Charles Goodhart

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Work on off-balance-sheet exposures

The attention of the BCBS was first drawn to off-balance-sheet exposures and activities in the course of the tour de table on ‘Recent developments in banking supervision’ at the thirty-second meeting of the BCBS (5–6 November 1984) (BS/84/70). Here it was noted that:

in the context of the increasing ingenuity of banks in developing techniques for removing business from their balance sheets and the appearance of new forms of contingent liability, it was considered desirable to conduct a survey of the various off-balance-sheet activities being conducted by banks in different member countries. The Secretariat was asked to draft a short note requesting members to list and describe all the types of contingent commitment which they observed currently within their own banking systems. These should be sent in before the end of the year. The Secretariat would then be in a position to draft a paper summarising members’ contributions for discussion at the next meeting with a view to preparing a paper for the Governors.

A questionnaire was duly circulated, and the results for each country presented in early 1985 (BS/85/10), and then covered by a quite lengthy introductory note by the Secretariat (14 June) (BS/85/39). This paper began by listing the various forms of such exposures, and then continued with first a ‘Commentary’ on the supervisory implications of such innovations, and, second, ‘Supervisory responses to these developments’. The ‘Commentary’ gives a nice, clear account of regulators’ appreciation of these issues in the 1980s, and is, therefore, attached as Appendix A.

10

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Ernst HaasWhy Collaborate?World Politics321980357
Richard PortesAlexander SwobodaThreats to International Financial StabilityCambridgeCambridge University Press1987

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