Study Of Commercial Bank Balance-sheet Business

Since the tide of exploring new business in the western bank industry in 1970s, Off-balance Sheet Activities (OBSA) became a breaking active part of financial innovation. Characterized by its low cost, high profit, low capital investment, and risk elusion, OBSA is not only bringing huge energy to the modern commercial banking but also playing a function of serving clients, stabilizing clients, and improving the traditional assets & liabilities business. Now the OBSA revenue contributes 30%-70% of takings in the western bank industry, while non-interest income from China's commercial banks accounts for less than 15% of the takings due to OBSA's small scale and singleness, we can expect the great potential of this area in China.This article focused on the OBSA, analyzed the motive and status quo of foreign commercial banks'OBSA business; through the experience of foreign banks, the author explained the reason of local commercial banks'low competence; the author also analyzed the feasibility for OBSA business model in China from business practice: the development of"Industry-Business-Bank"business based on the traditional guaranty platform, together with the generalization of securitization of financial assets, is a compatible way of OBSA innovation for local banks, further analysis was put on the OBSA's influence towards commercial banks'internal business. In virtue of economic theories, the author explained the negative effects caused by OBSA towards macro economic policies, especially on the finical system, amount of credit and transmission of monetary policy. From the actual practice of OBSA in China, the author designed a risk-control system to identify, measure and control the OBSA.