Asset Liability Management (ALM) refers to the management of various risks found in banks’ and credit unions’ balance sheets, including interest rate, prepayment, credit, liquidity, and operational risk. This two-session course focuses on interest rate and liquidity risk. From a regulator’s viewpoint, specific focus is on the identification, measurement, monitoring, and controlling of these risks. ALM is not an exact science, but a process that, if executed properly, is built into banks’ and credit unions’ cultures. The process begins with the asset liability committee, commonly referred to as ALCO. Part I of this course addresses interest rate risk (IRR) with models running from simple static gaps, to the more complex models of income simulation and economic value of equity. Part II of this course analyzes how banks and credit unions manage liquidity risk, including liquidity contingency plans. Note: The target audience for this course is not large complex banking organizations.
By the end of the course, participants will be able to:
- Explain the ALM process
- Identify and apply the different interest rate risk models used in the ALM process
- List the different assumptions used in the various models
- Describe how a bank/credit union manages liquidity
- Analyze how to identify, measure, monitor and control IRR and liquidity risks to which banks/credit unions are exposed
- Differentiate between ALM and risk management
- Describe the differences between qualitative and quantitative issues
- Determine what, if any, other measures are used for guidance
- Explain the price of liquidity and capital to the bank/credit union
Suggested Prerequisites: None
Program Level: Foundational
Target Audience: Anyone who wants to learn about asset liability management, such as staff from operations, IT, legal, compliance, middle office, or HR, and regulators who work closely with various aspects of asset liability management.
Advance Preparation: None
Computers and Financial Calculators: Computers or tablets for viewing and accessing the electronic documents. Calculators are required for basic calculations.
Recommended CPE Credits: 2.4 hours per session or 4.8 hours for both sessions
Duration: 2 Hours
Time: 1:00-3:00 p.m. ET
Price: $279 per session