Off-balance-sheet items can generate cash flows that immediately impact the bank's financial performance.

Question

Quizplus · Accepted Answer

Off-balance-sheet items are assets or liabilities that are not recorded on a bank's balance sheet but can still impact its financial performance, such as loan commitments, letters of credit, or derivative contracts. These items can generate immediate cash flows and therefore have a direct effect on the bank's financial performance.

Off-Balance-Sheet Items Can Generate Cash Flows That Immediately Impact the Bank's