Changes to the Balance Sheet in Banking and Finance

Traditional players in banking and finance should consider the recent changes to the balance sheet by flexing and unbundling their balance sheets. This could involve deciding which assets should remain under the bank's balance sheet or be syndicated to others. The majority of the net increase of financial stock happens off balance sheet, with a significant amount being funded by sources other than traditional bank deposits. Banks have opportunities to do business they couldn't do before, manage their balance sheets more effectively, and generate returns by onboarding someone else's credit exposure. This evolving landscape challenges the traditional definition of a bank, as many individuals can now hold assets directly, bypassing the need for traditional deposit and credit facilities from banks.