Asset-Liability Management (ALM) is a senior level management responsible for supervision/ management of market risk (mainly interest rate and liquidity risks) comprises of senior officials from treasury, chief financial officer, business heads generating and using the funds of the bank, credit, and individuals from the departments having direct link with interest rate, foreign exchange and liquidity risks. The CEO must be the head of the committee.
Modern risk management
now
takes place from an integrated approach
to enterprise risk management that reflects the fact that interest rate risk, credit
risk, market risk, and liquidity risk are all interrelated.