Dictionary of Banking Terms: off-balance sheet items
off-balance sheet items
obligations that are contingent liabilities of a bank, and thus do not appear on its balance sheet. In general, off-balance sheet items include the following: direct credit substitutes in which a bank substitutes its own credit for a third party, including standby letters of credit; irrevocable letters of credit that guarantee repayment of commercial paper or tax-exempt securities; risk participations in bankers' acceptances; sale and repurchase agreements; and asset sales with recourse against the seller; interest rate swaps; interest rate options and currency options, and so on.
20% risk weight: short-term commercial letters of credit, and documentary letters of credit collateralized by the underlying shipments.
