MANAGING CORE HAZARDS IN FINANCIAL:

ASSET-LIABILITY ADMINISTRATION (ALM)

BANGLADESH BANK

Property Liability Management Policy Property Liability Administration (ALM) can be an integral part of Traditional bank Management; and thus, it is essential to have got a structured and systematic method for manage the Balance Bed sheet. Banks need to have a committee comprising from the senior supervision of the lender to make significant decisions related to the Balance Piece of the Lender. The committee, typically named the Advantage Liability Panel (ALCO), should meet atleast once each month to examination, review and formulate technique to manage the total amount sheet. In every ALCO appointment, the key parts of the discussion needs to be minuted as well as the action details should be outlined to better position the bank's balance sheet. In each and every ALCO getting together with, action factors taken in earlier times ALCO appointment should be analyzed to ensure setup. Specific capabilities of ALCO are: 1 . To receive and review information on liquidity risk, marketplace risk and capital management as covered in this survey. 2 . To recognize balance sheet administration issues like balance sheet spaces, interest rate gap/profiles etc . which have been leading to under-performance. 3. To review deposit-pricing strategy for the local marketplace. 4. Assessment liquidity contingency plan for your bank.

PART A EXECUTIVE OVERVIEW..................................................................................................... 4 PURPOSE/METHODOLOGY/LIMITATIONS/DISCLAIMERS..................................... 5 COVERAGE STATEMENT.......................................................................................................... several ORGANISATIONAL COMPOSITION..................................................................................... 8 PROCESS................................................................................................................................. 9 1 . ALCO AND ALM................................................................................................................ being unfaithful 2 . THE COMMITTEE.......................................................................................................... 15 3 CRUCIAL AGENDAS............................................................................................................... 15 4 ALCO PAPER................................................................................................................... 15 4. 1 COMMENTARY...................................................................................................... 12 4. a couple of INTEREST RATE TENDENCY OF THE MARKET................................................. 11 four. 3 "BALANCE SHEET".................................................................................................. 11 some. 4 SYMPTOMS.......................................................................................................... 11 four. 5 MATURITY PROFILE........................................................................................... 14 4. 6 LIQUIDITY TEST OUT................................................................................................... 15 5. 7 INTEREST PROFILE................................................................................. of sixteen 4. almost 8 COMPLIANCE........................................................................................................ 16 5. THE ALCO PROCEDURE.................................................................................................. 17 6. ACTION POINTS........................................................................................................... 17 7. IMPLEMENTATION AND REVIEW OF STRATEGIES........................................ 17 8. SPECIAL ALCO MEETING......................................................................................... 18 9. MARKETPLACE RISK.............................................................................................................. 18 KEY CONCEPTS...

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