In Banking, Asset and Liability Management (often abbreviated ALM) 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, credit risk and operational risk. Asset liability management (ALM) is a strategic management tool to manage interest rate risk and liquidity risk faced by banks, other financial services companies and corporations. Banks manage the risks of asset liability mismatch by matching the assets and liabilities according to the maturity pattern or the matching of the duration, by hedging and by securitization. . Modern risk management now takes place from an integrated approach to enterprise risk management that reflects the fact that interest rate risk, credit risk, market risk, and liquidity risk are all interrelated.
Asset-Liability Management (ALM) is an important planning of the banks for facilitating the liquidity management. ALM is an important tools for identification the mismatches between the total assets and total liabilities of a bank. It plays an important role in maintaining an adequate level of liquidity in terms of banks The study highlights the insight of the subject to the students, researchers, and the practitioners.
An Introduction to Banking provides an introduction to liquidity risk management and asset–liability management. It begins with an overview of modern banking, the goals of a bank, how they operate, and how a breakdown in the banking system contributed to the crisis.
Handbook of Asset and Liability Management - Set,1 & 2
The Handbooks in Finance are intended to be a definitive source for comprehensive and accessible information in the field of finance. Each individual volume in the series presents an accurate self-contained survey of a sub-field of finance, suitable for use by finance and economics professors and lecturers, professional researchers, graduate students and as a teaching supplement. It is fitting that the series Handbooks in Finance devotes a handbook to Asset and Liability Management. Volume 1 contains chapters that lay the theoretical foundations and develop the methodologies essential for the development of asset and liability management models.*Each volume presents an accurate survey of a sub-field of finance*Fills a substantial gap in this field*Broad in scope
Deregulation and integration have led banks and financial institutions into competition both on Assets side as well as Liabilities side of the Balance-sheet, forcing them to assume greater and newer risks in their quest for higher returns.Asset Liability Management (ALM) has grown up as a response to the problem of managing modern day business which is exposed to a wide variety of risks in an environment where interest rates, exchange rates and economic conditions are highly volatile.The maturity mismatches and changes in the levels of assets and liabilities cause both liquidity risk and interest-rate risk.The ALM process is the only solution for banks to survive in this rapidly changing environment where the composition and risk profile of their assets and liabilities have a direct impact on their performance and profitability.
The book is composition of thoughts & ideas for researchers on CRM in banking sector. This will be helpful in developing the relationship management strategies in financial sector in general and banking sector in particular.The book will also help in understanding the importance of service quality,satisfaction,trust,commitment and loyalty.Book will help in effecient and effective development of RM for adademicians, professional/practitioners,researchers,students and policymakers.
Risk Management, the process of measuring the risks, controlling them and implementing measures in order to achieve the desired risk profile, is fundamental to all aspects of a bank’s activities. Due to the liberalization of financial markets, advances in technology and the various risks brought by these developments, the way that banks practice Risk Management has substantially changed during the last years. The important role that an effective Risk Management plays in ensuring banks’ profitability and continuity is widely proven. This survey was conducted to provide a status position on the extent to which Risk Management is practiced by banks in North Cyprus. The survey revealed that risk management systems in TRNC banks are relatively underdeveloped and there is a low level of awareness in banks on the importance of employing an integrated Risk Management framework. There are various gaps that demonstrate the need for developing Risk Management in TRNC banking sector and employing innovative Risk Management tools to manage the risks, non-credit risks in particular.
Digital Asset Management is a relatively new concept which revolutionized the corporate sector in managing documents, files, images, audios and videos as a decision support system interacting with in-house and outside people as well as acquiring inputs to equip with swiftly changing business environments in a techno-savvy society. The idea is integrating with similar systems like Enterprise Content Management, Web Content Management, Media Asset Management etc. which may eventually merge with Enterprise Resource Planning. Digital Asset Management is normally initiated with some functions of certain departments and coexists with traditional systems of records and document management.Invoice being a digital asset for marketing is programmed and software used for the same is presented here with screen shots.
This innovative book critically deals with how liberalization and global integration have increased banking fragility in India. Since early nineties, banking and currency crises have rocked the world. These crises involved huge resolution costs and it became priority of governments and policy makers to avert them by adopting pre-emptive measures. One chapter in the book identifies banking crisis episodes in India and designs an early warning system for crisis prediction. Another chapter makes a macro-prudential analysis of the default risk of Indian banks and assesses how external and domestic factors impact bank asset quality. Stress tests examine resilience of banks in the event of the most extreme but plausible macroeconomic shocks. A broad chapter also relates to bank stock volatility in contemporary global financial market and determines risk sensitivity of bank stocks. Based on analytical findings in the book, several policy implications and measures on how to cope with banking fragility have been discussed. The book is an essential read for students, researchers and public policy professionals who are interested in globalization and bank vulnerability in emerging economies.
The past decades have witnessed an unprecedented increase in the number of financial distress episodes, both in developed and developing countries. Therefore, the issue of analyzing the determinants of the financial crises have become increasingly important for economies. The ability for early detection will help to minimize any costs brought about by financial instability. This book aims to carry out an extensive analysis of the micro (bank-specific) and the macro determinants of the bank fragility in the North Cyprus economy over the period 1984-2002. The macro factors considered in the analysis are macroeconomic characteristics, financial and structural weaknesses, external shocks and potential contagion effect from Turkey. Utilizing two methods, namely the logit model and the logistic survival analysis, will help in estimating the determinants of the probability of bank failure and the determinants of the timing of bank failure. An understanding of the determinants of any financial weaknesses would help bank examiners, supervisors, regulators, investors and policy makers in their decisions to alert management in time and to prevent bank failure.
Indian banking system has well developed organization in the country. Entrepreneurs and creative thinker were established the most of the banks in India. In the pre –independence era, they provided financial support to the farmers, business community, traders and industrialists in India. At present, largest commercial bank in the country is State Bank of India. . Banking sector in India has seen lots of positive developments in the last decade. The policy makers in India have made lot of efforts to improve the regulation in the banking sector. The banking sector evaluates positive results in growth, profitability, non- performing assets, credit risk and funds management. In this scenario, some of the banks have recognized innovation and growth aspects. Banking industry in India has to strengthen them to support to the Indian economy.
Banking industry serves as the backbone of the financial sector that accumulates saving from surplus economic units in the form of deposits and provides it to deficit economic units in the form of advances. So it is of great importance to keenly observe the performance of the banks and their compliance with the regulatory requirements. Performance of the banks is measured at two levels, one is at the management and regulatory level of the banks and another is at external rating agencies. It is of great importance that both these ratings present the same results about the condition of the banks to provide clear information to investors and management. CAMELS is the supervisory and regulatory rating system implemented by State Bank of Pakistan. It takes into account six important components of a bank when it evaluates performance of the bank. These components are Capital, Assets, Management, Earning, Liquidity and Sensitivity to market risk. PACRA rating agency is the dominant credit rating agency of Pakistan that performs ratings for most banks. In our research we examine the similarities in the results generated by CAMELS rating system and PACRA rating agency.
While the banking crisis in the 1930s was primarily a liquidity problem, the crisis in investment banking in the US around 2008 was more a solvency issue. The first part of this book deals with banking crisis, liquidity and solvency. The focus is on capital adequacy as a way to ensuring greater stability in banks. The second part of the book deals with asset markets in emerging economies. Real assets can be as important as financial assets in any economy. This is even more the case in emerging economies. So the usual paradigm with focus on financial assets alone is inadequate as real asset markets have their own nuances particularly in emerging economies. This book deals with both real and financial assets. It encompasses issues like adverse selection, liquidity crunch, undervaluation or overvaluation, segmented markets, and even corruption related to these assets. This book is useful not only in the area of finance but also in development economics. Students, researchers, practitioners and policy makers can benefit from this insightful, fresh, interesting, and carefully written book. It can be useful for a long time.