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The difference between intermediate business and off-balance-sheet business
First, the nature is different.

1. Intermediary business: refers to the business that commercial banks collect fees for customers' payment and other entrusted matters.

2. Off-balance sheet business refers to the business activities of commercial banks that are not included in the balance sheet, but can affect the bank's current profits and losses.

Second, the specific business is different.

1. Intermediary business: remittance business, in which customers give cash to banks and banks remit cash to third parties living in other places; Letter of credit business, a commodity letter of credit business in which a customer entrusts a bank to pay a seller in a different place, and a currency letter of credit business in which a customer gives a certain amount of cash to the bank in exchange for a voucher to exchange cash at a branch or correspondent bank in other cities of the bank.

2. Off-balance sheet business: loan commitment, which can be divided into revocable commitment and irrevocable commitment; Guarantee; Financial derivatives, such as futures, swaps, options, forward contracts, upper and lower interest rates and so on. Investment banking business, including securities agency, securities underwriting and distribution, gold trading, etc.

Off-balance sheet business refers to the business activities of commercial banks that are not included in the balance sheet, but can affect the bank's current profits and losses. Divided into narrow sense and broad sense. In a narrow sense, off-balance sheet business refers to those businesses that are not included in the balance sheet, but are closely related to asset business or liability business on the balance sheet.

Off-balance-sheet business in a broad sense includes not only the off-balance-sheet business in the narrow sense mentioned above, but also settlement, agency, consulting and other businesses. Off-balance-sheet items are also called contingent liabilities and contingent assets, or contingent assets and liabilities.

The so-called off-balance-sheet activities (OBS) refer to the business activities that commercial banks engage in, which are not included in the balance sheet according to the prevailing accounting standards and do not affect their total assets and liabilities, but can affect the bank's current profits and losses and change the bank's return on assets.

Off-balance sheet business can be divided into narrow sense and broad sense.

In a narrow sense, off-balance sheet business refers to those business activities that are not included in the balance sheet, but are closely related to on-balance sheet asset business and liability business, and will be transformed into on-balance sheet asset business and liability business under certain conditions. These business activities are usually called contingent assets and contingent liabilities. They are risky business activities and should be disclosed in the notes to the accounting statements.

Narrow off-balance sheet business includes: (1) loan commitment, which can be divided into revocable commitment and irrevocable commitment; (2) guarantee; (3) Financial derivatives, such as futures, swaps, options, forward contracts, upper and lower interest rates, etc. ; (4) Investment banking, including securities agency, securities underwriting and distribution, gold trading, etc.

Off-balance-sheet business in a broad sense includes not only off-balance-sheet business in a narrow sense, but also risk-free business activities such as settlement, agency and consultation, so off-balance-sheet business in a broad sense refers to all businesses engaged by commercial banks that are not reflected in the balance sheet. According to the requirements put forward by the Basel Committee, off-balance sheet business in a broad sense can be divided into two categories: one is contingent creditor's rights (debts), that is, off-balance sheet business in a narrow sense. Second, financial services, including: (1) trust and consulting services; (2) Payment and settlement; (3) Agency service; (4) Loan-related services such as loan organization, loan approval and syndicated loan agency. (5) Import and export services, such as agency services, trade declaration, export insurance business, etc.

Usually, what we call off-balance sheet business generally refers to off-balance sheet business in a narrow sense.

type

1. Guarantee business refers to the business that a commercial bank accepts the entrustment of customers and assumes the responsibility for a third party, including letter of guarantee, standby letter of credit, documentary letter of credit, acceptance, etc.

2. Commitment business refers to the agreed credit business provided by commercial banks to customers on a certain date in the future according to the agreed conditions, including loan commitment.

3. Financial derivative transactions refer to derivative transactions such as forwards, swaps and options of currencies (including foreign exchange) and interest rates conducted by commercial banks to meet the needs of customers' hedging or their own position management.

main content

Trade financing business

Financing guarantee business includes? Promise? Standby letter of credit? Loan commitment? Loan sales

The intermediary business and off-balance-sheet business of commercial banks are both related and different, which is easy to be confused.

The relationship between them is: both of them are not reflected in the balance sheet of commercial banks, and some of their businesses do not occupy the bank's funds, and banks play the role of agents and are entrusted by customers; The main sources of income are service fees, handling fees and management fees. The difference is that the intermediary business is more traditional and less risky; Off-balance-sheet business is more innovative and risky, which is generally closely related to on-balance-sheet business and can be transformed into on-balance-sheet business under certain conditions.