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CAIIB ABM Module A & C By Ashish Sir Class 4
What is the primary objective of Asset Liability Management (ALM) in banks?
ALM aims to manage the balance sheet risks arising from mismatches in assets and liabilities, ensuring liquidity, profitability, and solvency by optimizing the risk-return trade-off.
What is the concept of Interest Rate Risk in Banking Book (IRRBB)?
Risk of loss from interest rate movements affecting banking book.
How is Net Interest Margin (NIM) calculated?
NIM is calculated as (Interest Income − Interest Expense) / Average Earning Assets × 100, and it measures the profitability of a bank's lending and borrowing activities.
What is Repricing Risk in the context of ALM?
Risk arising when assets and liabilities reprice at different times.
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