📝 One-liners · 66 cards
Treasury and asset liability management
What is the primary objective of Asset Liability Management (ALM) in a bank?
The primary objective of ALM is to manage the risks arising from mismatches between assets and liabilities in terms of maturity, interest rate, and liquidity, while optimizing profitability.
What is the primary function of a bank's treasury department?
Managing liquidity, investments, and interest rate risk centrally.
What does the term 'Net Interest Margin' (NIM) represent in treasury management?
NIM is the difference between interest income earned on assets and interest paid on liabilities, expressed as a percentage of total earning assets, and is a key measure of a bank's profitability.
What is 'Negative Gap' in ALM and what does it signify?
Liabilities reprice faster than assets, risking margin squeeze.
🔒
Unlock 66 revision one-liners
Interactive flashcard deck — flip every card to drill questions and answers, mark the ones you got wrong, and revise smarter for Treasury and asset liability management.
🪙
Unlock cost
300 coins
30-day access · re-unlocks free for 30 days