From the FDIC Manual of exam policies 3.8-1: "When analyzing these off-balance sheet lending activities, examiners should evaluate the probability of draws under the arrangements and whether an allowance adequately reflects the risks inherent in off-balance sheet lending activities. (Such allowances should not be included in the allowance for loan and lease losses (ALLL) since off-balance sheet items are not included within the scope of FAS 5 and 114.) Allowance for off-balance sheet items should be made to "Other liabilities."

How are other banks determining the allowance for these items? I am a bit confused on how this slots in "other liabilities" also.