7-29 Off-balance-sheet activities have become an important source of fee income,even though losses on these activities can cause a financial institution to fail.

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Off-balance-sheet activities refer to financial transactions that do not appear on a company's balance sheet, but can still have an impact on its financial health. Examples of these activities include loan commitments, derivatives, and securitization. While these activities can generate fee income for financial institutions, they also carry risks that can lead to losses and ultimately cause a bank to fail. Therefore, off-balance-sheet activities have become a controversial issue in the financial industry, with some experts arguing that they should be more strictly regulated.

7-29 Off-Balance-Sheet Activities Have Become an Important Source of Fee