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CAIIB ABM Module A & C By Ashish Sir Class 6
What is the primary objective of Asset-Liability Management (ALM) in a bank?
ALM aims to manage the risk arising from mismatches between assets and liabilities in terms of maturity, interest rate, and liquidity, ensuring stable net interest margins and solvency.
What is the primary function of the Asset-Liability Committee (ALCO) in a bank?
Oversees balance sheet risk and sets ALM policy guidelines.
What does the term 'Net Interest Margin (NIM)' represent in banking?
NIM is the difference between interest income earned on assets and interest paid on liabilities, expressed as a percentage of average earning assets, and is a key profitability indicator for banks.
What does 'Interest Rate Risk in the Banking Book (IRRBB)' refer to?
Risk of loss from interest rate changes affecting banking book positions.
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