ALM is the administration of affected policies and procedures to embrace financial risks associated with volatilities in Interest Rates, Exchange Rates and other factors that may affect the institution´s Liquidity.
ALM main objective is to limit risk to acceptable levels, through constant monitoring and anticipating possible price gaps or differences between assets and liabilities.
As a consequence of financial crisis in 2008, new restrictions and consequences entered the banks internationally (Basel III).
Correctly measure what it costs to fund an asset, allow banks to be more competitive and focus efforts on more profitable business lines / products.
The challenge is that as the entity grows and the regulations for the industry increase, the standardization of policies and procedures allows to maintain control of the associated risks and make the Balance even more profitable.
The Superintendence of Banks of Panama recently issued a circular to promote the implementation of the principles of ALM.
Compliance with the regulations of the Banking Superintendence regarding Basel III is ensured.
Improvement of the “Net Interest Margin”.
- Improvement in risk underwriting in asset operations.
- Product profitability.
- Leverage Optimization.
Balance solidity for future crises.
A work tool is delivered that processes historical data, is practical and easy to handle.
Personnel in charge are trained under the “hands-on” mode.