Bank of England Studies Risks of Off-Balance-Sheet Activities

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Bank of England Studies Risks Of Off-Balance-Sheet Activities

LONDON -- The Bank of England will attempt to pinpoint the relative risks of off-balance-sheet business by consulting with banks in London and then declaring new capital adequacy requirements, probably by the end of this year.

The move, in the form of a "consultative paper" distributed last week, represents further international scrutiny of fee-generating business in which a bank does not loan funds but does take on a degree of risk.

The Federal Reserve Board and other central banks are studying this relatively new and vastly popular area of banking. The supervisory point of view is being considered by a committee of central bankers who meet at the Bank for International Settlements in Basel, Switzerland.