What special problem do$$ off$-$balance$-$sheet activities present to bank$$ regulators?

A$.$

These activities do not appear on bank balance sheets and thus limit a$$ bank's ability to pursue$$ high$-$risk investments.

B$.$

These activities do not appear on bank balance sheets and thus cannot be handled with bank capital requirements.

C$.$

Since data for$$ off$-$balance$-$sheet activities are not always$$ available, asymmetric information problems may arise.

D$.$

All of the above are possible problems that bank regulators may encounter.

Part $2$

What have bank regulators done about this$$ problem, if$$ anything?

A$.$

Bank regulators have decided to ignore some of the$$ off$-$balance$-$sheet activities by banks.

B$.$

Bank regulators have lowered the level of$$ off$-$balance$-$sheet activities permitted for banks.

C$.$

Bank regulators have imposed an additional$$ risk$-$based bank capital requirement.

D$.$

At the present$$ time, there is no way to solve the problem of$$ off$-$balance$-$sheet activities.