Asset liability management

The Balance Sheet Management ( engl. asset liability management, often abbreviated to ALM), refers to the coordination of the maturity structure of assets and liabilities balance sheet positions, respectively, to control the associated interest rate risk. This method of risk management is primarily used by banks and insurers.

The objective of the balance sheet structure management is the control of all balance sheet items to optimize the expected return under uncertainty. In a continuous process the same assets and liabilities on their returns or interest and staggering are investigated. From this, the strategy will be developed to achieve with the risk limits at specified financial targets.

Balance sheet structure management is becoming increasingly important for insurance companies mainly from regulatory aspects for stronger corporate risk control, particularly in the context of Basel II for banks and Solvency II in importance.

Credentials

Weblink

• Fundamentals of Asset Liability Management Asset Liability Management - the insurance on the way from the planning calculations for risk management. Hans -Joachim Zwiesler, insurance in transition (ed. K.Spremann ), Heidelberg, 2004, Springer, pp. 117-131, ISBN 3- 540-21433 -X

• Risk Management