Understanding Core Risks in Banking: Asset-Liability Management

🏦 Welcome to the world of banking! In this video, we dive deep into Asset-Liability Management (ALM) and the core risks faced by banks - capital risk, liquidity risk, and interest rate risk.

🔐 Capital Risk: Discover the importance of capital in protecting banks from insolvency caused by losses, and the regulatory requirements for maintaining a minimum amount of capital relative to risk assets.

💰 Liquidity Risk: Learn how banks manage potential liquidity issues, maintain sufficient liquid assets, and meet regulatory requirements to avoid liquidity crises.

📈 Interest Rate Risk: Understand how fluctuations in the yield curve impact a bank's earnings and profitability, and how banks manage structural and market risks associated with interest rates.

💼 In addition, explore other critical risks such as concentration risk, settlement risk, securitisation risk, and pension risk, that are essential for banks to identify, analyze, and stress-test.

💪 Lastly, we discuss the importance of a strong credit rating for a bank's success and credibility in various key areas.

👩‍💼👨‍💼 Join us as we delve into these core risks in banking and the key measures banks take to manage them effectively.

👉 For more in-depth insights, connect with Claire Trythall on LinkedIn.