asset/liability management


asset/liability management
asset/liability management ( ALM)
Coordinated management of all of the financial risks inherent in the business conducted by a financial institution. The process of balancing the management of separate types of financial risk to achieve desired objectives while operating within predetermined, prudent risk limits. Accomplishing that task requires coordinated management of assets, liabilities, capital, and off-balance sheet positions. Therefore, in the broadest sense of the term, ALM is simply the harmonious management of cash, loans, investments, fixed assets, deposits, short-term borrowings, long-term borrowings, capital, and off-balance sheet commitments. However, in practice, the term is often used to refer to segments of that broader definition such as only interest rate risk management or only interest rate and liquidity risk management.
See earnings at risk, market value at risk and market value of portfolio equity. American Banker Glossary
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The task of managing the funds of a financial institution to accomplish two goals: (1) to earn an adequate return on funds invested and (2) to maintain a comfortable surplus of assets beyond liabilities ( liability). Also called surplus management. Bloomberg Financial Dictionary

Financial and business terms. 2012.

Look at other dictionaries:

  • Asset Liability Management — Asset Liability Management, oft abgekürzt mit ALM, bezeichnet ein Risikomodell zur Aktiv Passiv Steuerung in Bilanzen. Diese Methode des Risikomanagements wird hauptsächlich von Banken und Versicherern angewendet. Zielsetzung beim ALM ist es, mit …   Deutsch Wikipedia

  • Asset liability management — In banking, asset liability management is the practice of managing risks that arise due to mismatches between the assets and liabilities (debts and assets) of the bank.Banks face several risks such as the liquidity risk, interest rate risk,… …   Wikipedia

  • asset-liability management — The management of assets and liabilities in order to influence the credit risk, interest rate risk, and liquidity risk of a bank. See asset and liability management committee; gap analysis …   Big dictionary of business and management

  • Asset/Liability Management — A technique companies employ in coordinating the management of assets and liabilities so that an adequate return may be earned. Also known as surplus management. By managing a company s assets and liabilities, executives are able to influence net …   Investment dictionary

  • Asset/liability management — Also called surplus management, the task of managing funds of a financial institution to accomplish the two goals of a financial institution: (1) to earn an adequate return on funds invested and (2) to maintain a comfortable surplus of assets… …   Financial and business terms

  • asset/liability management committee — ( ALCO) A committee, usually comprising senior managers, responsible for managing assets and liabilities to maximize income and safety over the long run. In a financial institution, the ALCO is usually responsible for asset and liability… …   Financial and business terms

  • Asset liability mismatch — In finance, an asset liability mismatch occurs when the financial terms of the assets and liabilities do not correspond. For example, a bank that chose to borrow entirely in U.S. dollars and lend in Russian rubles would have a significant… …   Wikipedia

  • Asset–liability mismatch — In finance, an asset–liability mismatch occurs when the financial terms of an institution s assets and liabilities do not correspond. Several types of mismatches are possible. For example, a bank that chose to borrow entirely in US dollars and… …   Wikipedia

  • asset and liability management committee — ALCO A senior management committee of a bank or financial institution that has overall responsibility for setting and overseeing risk control policies in relation to the balance sheet (see asset liability management; gap analysis). In some cases… …   Big dictionary of business and management

  • Asset and Liability Management — Gestion actif passif Pour les articles homonymes, voir ALM. Poste Montant Comptes débiteurs 10 Prêts immobiliers aux ménages 25 Prêts d investissement aux entreprises 20 Titres d état 5 Dépôts et épargne …   Wikipédia en Français