Economically speaking, contingent assets and liabilities are contractual claims that directly impact the economic value of the equity holders' stake in an FI.

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Contingent assets and liabilities are contractual claims that have the potential to either increase or decrease the economic value of the equity holders' stake in a financial institution (FI). These claims are not certain, and their occurrence depends on the outcome of a future event. Examples of contingent assets include loans that have not yet been disbursed (but are approved) and unused lines of credit, while examples of contingent liabilities include loan commitments and warranties on products sold.

Economically Speaking, Contingent Assets and Liabilities Are Contractual Claims That