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.
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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.