Bank Treasury & ALM

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.