ASCI JOURNAL OF MANAGEMENT 29(1). 39-48 Copyright ? 1999 - Administrative Staff College of India. R. VAIDYANATHAN Asset-liability management: Issues and trends in Indian context This paper discusses issues in asset-liability management and elaborates on various categories of risk that require to be managed. It examines strategies for asset-liability management from the asset side as well as the liability side, particularly in the Indian context. It also discusses the specificity of financial
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these deposits are invested in trade, commerce and industries on term basis, i.e. short, medium and long term. A bank connects customers with capital deficit to customers with capital surplus. A bank’s deposits are its liabilities, and its loans and investments are its assets. It generates revenues in a variety of different ways including interest, transaction fees and fees for financial advices. The main method is via charging interest on the funds it lends out to customers. The bank profits from
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Executive Summary Liquidity management refers to meeting liquidity needs by using the outside sources of discretionary funds like government funds, discount window borrowings, repurchase agreements, certificates of deposits and other types of commercial borrowings. The major risk a bank runs is liquidity risk. Under any circumstances a bank has to honor its commitments. As a result, it has to make sure that enough liquidity is available to meet fund requirements in situations like liquidity crisis
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LIQUIDITY MANAGEMENT 2.0 OBJECTIVES: In this unit, an attempt has been made to understand the following aspects of liquidity management: ● Definition of Liquidity ● Dimensions and Role of Liquidity Risk Management ● Measuring and Managing Liquidity ● Measurement of Liquidity through Ratio Analysis 2.1 INTRODUCTION: The objectives of ALM are two fold: ensuring profitability and ensuring liquidity. Liquidity which is represented by the quality and marketability of assets and liability
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Financial Intermediaries, and Asset Management Firms Multiple Choice Questions 1 Financial Institutions 1) Financial enterprises, more popularly referred to as financial institutions, provide a variety of services. Which of the below is NOT one of these? A) Transform financial assets acquired through the market and constituting them into a different, and more widely preferable, type of asset–which becomes their liability. B) Exchange financial assets on behalf of customers but not for
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Chapter 8 ASSET-LIABILITY MANAGEMENT Asset-Liability Management 1 A Look At FNMA’s Balance Sheet December 31, 1995 Billion Dollars __________________________________________________________ Assets: Liabilities and S/Hs’ Equity: Mortgage Portfolio Investments Cash & Rec. & Other Other Total 253 57 3 4 317 Short-term bonds Long-term bonds Other Debt EQUITY Total 146 153 7 11 317 Question: What happens if the Mortgage Portfolio loses its value by 11 billion dollars? In other words, if the
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CHAPTER 6 ASSET-LIABILITY MANAGEMENT: DETERMINING AND MEASURING INTEREST RATES AND CONTROLLING INTEREST-SENSITIVE AND DURATION GAPS Goals of This Chapter: The purpose of this chapter is to explore the options bankers have today for dealing with risk – especially the risk of loss due to changing interest rates – and to see how a bank’s management can coordinate the management of its assets with the management of its liabilities in order to achieve the institution’s goals. Key Topic In This Chapter
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Financial Intermediaries, and Asset Management Firms Multiple Choice Questions 1 Financial Institutions 1) Financial enterprises, more popularly referred to as financial institutions, provide a variety of services. Which of the below is NOT one of these? A) Transform financial assets acquired through the market and constituting them into a different, and more widely preferable, type of asset–which becomes their liability. B) Exchange financial assets on behalf of customers but not for
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“The Impact of Asset Liability Management on Banks Profitability: A Comparative Study on Ethiopian Commercial Banks” Prepared by: Samson Abate ID No. GSE/1482/08 Submitted to: Samuel Kifle(Phd.) In Partial fulfilment of Business Research Methods Course January, 2016 Abstract Banks’ profitability is of utmost concern in modern economy. Banks are in a business to receive deposits or liabilities and to issue debt securities on the one hand and create or invest in assets on the other
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CHAPTER 6 ASSET-LIABILITY MANAGEMENT: DETERMINING AND MEASURING INTEREST RATES AND CONTROLLING INTEREST-SENSITIVE AND DURATION GAPS Goals of This Chapter: The purpose of this chapter is to explore the options bankers have today for dealing with risk – especially the risk of loss due to changing interest rates – and to see how a bank’s management can coordinate the management of its assets with the management of its liabilities in order to achieve the institution’s goals. Key Topic In This Chapter
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