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

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

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  • .....are netted, off balance exposures...
    – user29952
    Nov 17, 2018 at 13:59
  • Then what does "net" mean in this context? Does it mean that "adjustments are calculated/recognized outside balance exposure"?
    – jay
    Nov 17, 2018 at 14:01
  • to net something would mean to take a net amount of something:
    – Lambie
    Nov 17, 2018 at 14:54

1 Answer 1

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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 and 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 tell 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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