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Overview
Asset and Liability Management
(ALM) is about optimising the bank's balance sheet. It focuses
primarily on capital, liquidity & interest risk management
and, depending on the nature of the bank, credit, market &
operational risk.
The A.L.M. function provides the
policy framework for bank treasury and prescribes the techniques
and instruments used in the everyday implementation of policy.
Outline Content
- Bank-wide context: role, functions
- External context: regulation, competition
- Liquidity management
- Interest risk management
- Capital management
- Credit and counterparty risk
- Market risk
- Operational risk
- Organisation and management eg. transfer
pricing
- Shareholder value and E.V.A.
Educational Note
The practice of Bank A.L.M. and
treasury is evolving very rapidly in response to increased
financial market complexity and volatility, corresponding
fundamental changes in regulation and the merger-driven concentration
across the sector.
The FSMD approach to tailored training
in this area is to provide a simple skeletal framework for
understanding key concepts and issues and then to clothe the
framework in the specifics of that client’s bank.
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