asset liability management
Asset liability management (ALM) is the administration of policies and procedures that address
financial risks associated with changing interest rates, foreign exchange rates and other factors
that can affect a company’s liquidity. Asset Liability Management (ALM) seeks to limit risk to
acceptable levels by monitoring and anticipating possible pricing differences between a company’s
assets and liabilities.
To be effective, an ALM framework requires data to be available in real- or near-real time. The
data is used for data modeling,data mining, machine learning and game theory exercises
to analyze current and historical trends and make predictions about future events.
This was last updated in March 2012
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