off-balance sheet activity

Evaluating off-balance sheet exposures in banking crisis determination models

Given the evident effect that banks' off-balance sheet activity has had on systemic vulnerability in the sub-prime crisis, we test for a consistent impact of off-balance sheet exposures on the probability of banking crises in OECD countries since 1980. Variables capturing off-balance sheet activity have been neglected in most early warning models to date, mainly due to the lack of the data.