MANAGING OF BANK'S RISK ? ASSET ? LIABILITY MANAGEMENT (ALM)

ALM strategy is made in eighties like response to dynamic changes in the environment and financial markets aimed at optimizing the relationship of liabilities and assets. Banks had to when designing their strategies achieve a high degree of adaptability to long-term development and change, in terms of speed of methods and sources and investments. This strategy allows the management of the bank, starting from balance sheet items and their estimated risk rank, an active policy of structuring the assets and liabilities of the bank. The aim of this strategy is to minimize credit risk, interest rate risk and other types of banking risks arising from its business. The organizational aspects of the strategy are the responsibility of the ALCO (Asset and Liability Commitee), the governing body composed of directors and top managers.