Asset Management

ALM (Asset Liability Management)

Asset Liability Management (ALM) is a crucial subject in finance that focuses on balancing and managing the risks arising from the differences between assets and liabilities in order to optimize financial outcomes. The subject covers techniques and strategies to handle interest rate risk, liquidity risk, and market risk, ensuring that financial institutions, particularly banks and insurance companies, can meet their financial obligations. Students learn about gap analysis, duration analysis, and the use of derivatives for hedging risks. ALM also involves scenario analysis and stress testing to evaluate the impact of different market conditions on an institution's financial stability. Through this subject, students develop the ability to strategically align and manage the portfolio of assets and liabilities to enhance profitability and solvency.