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) 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 first published in March 2012

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