Part II
Bank Asset and Liability Management
Part I was a primer on banking, the elements of which all feed into the essence of banking, which is asset-liability management (ALM). We are in a position now to introduce ALM itself. In Part II of the book we review the main strands of the discipline, including a look at the role of the ALM Committee (ALCO) and ALCO reporting. This covers the terms of reference of the ALCO, a look at the main drivers of the ALCO agenda, and the management information (MI) content essential to effective ALCO governance. It also includes a detailed look at the organisation of the Group ALCO (GALCO) function in a multinational or multi-entity bank.
We further consider basic trading and hedging principles, and the role of risk reporting and stress testing.
