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| Bankingmanagement » Banking Management » Asset and Liability Management |
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Asset and Liability Management |
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Banking Management deals with the financial matters. One of the important segments of the banking management is asset and liability management. Asset and liability management basically deals with funding various products. This is one of the fundamental aspects of a financial institution. The Asset Liability Management is important in the smooth functioning of a commercial bank or a financial organization. It is an important part of the functionality since it deals with the assets of the organization and the various liabilities taking into consideration, the various risk factors.
The Asset and liability management which is also known as the ALM in short has a team of people who are responsible for the projects that require allocating funds to the various lending products.
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The team is also supposed to ensure that the currency, the interest rate and the maturity related characteristics of the assets and liabilities of the bank are within the parameters. Within the parameters means the bank assets and liabilities should not cross the limit from where the risk factors begin.
To stay within the Asset and liability management, the financial institutes make an extensive use of currency swaps and all the other products that deal with interest rates. The ALM team is engaged in developing new products and bringing out innovative solutions for marketing to meet the ever growing needs of the clients.
These teams collaborate with the other units and offer technical training to the borrowers. These technical trainings basically deal with pricing, marketing and credit related aspects of the products. These also include participating in negotiations on MDA with these borrowers. The ALM team maintains a good communication with the customers to develop better strategies and marketing tools to achieve the target.
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