Credit risk adjustments are netted off balance exposures before applying risk weighting.

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In the above example, does "net off" mean to exclude? which means that "adjustments are excluded from balance exposure".


Questionable sentence: Credit risk adjustments are netted off balance exposures before applying risk weighting.

This sounds totally unidiomatic because the word balance is used incorrectly. There is: on-balance sheet exposure & off-balance sheet exposure and plain old balance sheet exposure. In English, you don"t "net something off of something".

Here is the lingo describing this for banking from the European Banking Authority: credit risk adjustment

That said, I suppose they mean:Credit risk adjustments are netted from balance exposures before applying risk weighting. Where: netted from means: taken as a net amount from balance exposures.

But, to you the truth, it is hard to say what they mean exactly.

To net means: to calculate as a net amount.

Generally speaking, one has balance sheet exposure, not balance exposure.

I hope this helped.

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answered Nov 17, 2018 at 14:51

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