If the difference between an FI's contingent liabilities and contingent assets is positive then there is an additional obligation, or claim, on the FI's net worth.

Question

Quizplus · Accepted Answer

A positive difference between contingent liabilities and contingent assets implies that the FI has more liabilities than assets that may or may not become payable in the future. This creates an additional obligation or claim on the FI's net worth, reducing its overall equity position.

If the Difference Between an FI's Contingent Liabilities and Contingent