In recent times bank is witnessing volatility in interest rates as well as foreign exchange rates .Thus putting pressure on the banks for maintaining a good balance among spreads, profitability and long-term sustainability.
a. As a risk mitigating manager write a short note on asset – Asset liability management (ALM) and its importance (5 Marks)
b. Discuss the two main type of ALM technique in the banks. (5 Marks)