Loading presentation...

Present Remotely

Send the link below via email or IM


Present to your audience

Start remote presentation

  • Invited audience members will follow you as you navigate and present
  • People invited to a presentation do not need a Prezi account
  • This link expires 10 minutes after you close the presentation
  • A maximum of 30 users can follow your presentation
  • Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.


Make your likes visible on Facebook?

Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.

No, thanks

Copy of Asset Liability Management

No description

Norman Lloyd Simo

on 5 April 2013

Comments (0)

Please log in to add your comment.

Report abuse

Transcript of Copy of Asset Liability Management

Asset-Liability Management How the Financial System Works Lenders Excess supply of funds Borrowers In demand of funds Financial Intermediaries Lend money Receive Interest Pay Interest Borrow money How the funds are used How the funds are received Major Risks Involved Liquidity Risk Interest Rate Risk Focus of Asset Liability Management Bank Interest Income Interest Expense + + + - - - Net Interest Margin Net Interest Income (Interest Income - Interest Expense) Earning Assets Market Value of Equity Economic Value of Assets, Liabilities, and Off Balance Sheet Items + + + + - - - - Goals of ALM Managing asset cash flows in relation to its liability cash flows in a manner that contributes adequately to earnings and limits the risk to the financial margin.
Product terms, pricing, and balance sheet mix must balance members’ product demands with the need to protect the equity of the credit union. Process of ALM Creation of parameters Identification of risk based on parameters ! ! ! ! ! RISK! Risk Measurement RISK! Risk Management Mitigation and minimization Risk Policies Risk Tolerance Asset Liability Committee (ALCO) •Composition of ALCO
•What they do
•Opportunities for Enhancing Net Worth
•Protection from Risk
PLACEHOLDER Assets Balance Sheet Liabilities Equity Loaning of funds to receive interest Accepting deposits with interest. Off-Balance Sheet Items Focus for these two Assets Liabilities Maturity Mismatch Liquidity risk Credit Risk Interest Rate Risk Operational Risk Assets Liabilities Asset-Liability
Management Probability of loss because of illiquidity. Probability of loss from fluctuations in interest rates. Usually composed of the senior management of the bank.
To receive and review reports on liquidity risk, market risk and capital management as covered in this report.
To identify balance sheet management issues like balance sheet gaps, interest rate gaps and profiles that are leading to under-performance.
To review deposit-pricing strategy for the local market.
Review liquidity contingency plan for the banks and financial institutions. Benedict Cruz
Jose Antonio Diompoc
Regina Eunice Rafael
Neil Jamil Saavedra
Norman Lloyd Simo A group presentation for treasury operations
Full transcript