Off-Balance-Sheet Exposure : Off-Balance-Sheet Exposure Off-balance sheet exposure is contingent in nature- Guarantees, LCs, Committed or back up credit lines etc. A contingent exposure may become a fund-based exposure in Banking book or trading book. for banking book off-balance sheet instruments: the exposure value is obtained by converting off-balance sheet exposures into credit equivalent amounts using the credit conversion factors applicable under the Standardized approach to credit risk, as set out in section 3.3 of the CAR Guideline, subject to a minimum value of 10%.

positions, CDO warehouses held in the trading book, off-balance sheet SIVs and so on. So what is the third lesson that prudent long-term, liability-based insurance investors should learn from recent experience? Regardless what our modelled risk numbers tell us, we cannot let our exposure get so big that it threatens our for banking book off-balance sheet instruments: the exposure value is obtained by converting off-balance sheet exposures into credit equivalent amounts using the credit conversion factors applicable under the Standardized approach to credit risk, as set out in section 3.3 of the CAR Guideline, subject to a minimum value of 10%.