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Asset-Liability Management by riskglossary.com; Asset - Liability Management System in banks - Guidelines Reserve Bank of India; Asset-liability Management: Issues and trends, R. Vaidyanathan, ASCI Journal of Management 29(1). 39-48; Price Waterhouse Coopers Status of balance sheet management practices among international banks 2009; Bank for ...
An accurate knowledge of these charges and credits is also critical to asset and liability management (ALM), and to the management of overall interest rate-and liquidity risk. [13] It is also of increased relevance re regulatory requirements, as banks are expected to state their funding costs accurately, as these affect the bank's liquidity ...
Asset/liability modeling is an approach to examining pension risks and allows the sponsor to set informed policies for funding, benefit design and asset allocation. Asset/liability modeling goes beyond the traditional, asset-only analysis of the asset-allocation decision. Traditional asset-only models analyze risk and rewards in terms of ...
Collateral management is the method of granting, verifying, and giving advice on collateral transactions in order to reduce credit risk in unsecured financial transactions. The fundamental idea of collateral management is very simple, that is cash or securities are passed from one counterparty to another as security for a credit exposure. [9]
A 2007 run on Northern Rock, a British bank. The Diamond–Dybvig model is an influential model of bank runs and related financial crises.The model shows how banks' mix of illiquid assets (such as business or mortgage loans) and liquid liabilities (deposits which may be withdrawn at any time) may give rise to self-fulfilling panics among depositors.
Relatedly, the bank’s treasury is usually integrally involved in balance sheet management more generally, suggesting which currencies and terms are favorable from a funding perspective and which assets are required to meet various regulatory targets.
The FDIC discuss liquidity risk management and write "Contingency funding plans should incorporate events that could rapidly affect an institution’s liquidity, including a sudden inability to securitize assets, tightening of collateral requirements or other restrictive terms associated with secured borrowings, or the loss of a large depositor ...
In essence, the liability-driven investment strategy (LDI) is an investment strategy of a company or individual based on the cash flows needed to fund future liabilities. It is sometimes referred to as a " dedicated portfolio " strategy.