WHY THIS COURSE?

Balance sheet optimization and asset and liability management are crucial aspects of financial management for banks and other financial institutions. BSM refers to the strategic management of assets and liabilities to ensure a financial institution’s financial health and stability. Overall, effective balance sheet management is crucial for organisations to maintain financial stability, optimise profitability, manage risks, and ensure long-term sustainability in an ever-changing economic environment. It provides a strategic framework for aligning assets and liabilities to meet a financial institution’s objectives and obligations while minimising risk and maximising profitability.

Agenda

DAY 1

• Asset and Liability Management Organisation & Effectiveness
• Role of asset and liability management
• Crises that shaped modern ALM
• Improving ALM and ALCO effectiveness
• Balance Sheet Optimisation
• Balance sheet budgeting and planning
• Balance sheet mixResource allocation
• Capital Management
• Role, structure and regulations
• Determining the right amount of capital
• Capital optimisation by the business
• Case Study
• Improving returns
• Liquidity Management
• A review and reminder of liquidity management
• Liquidity optimisation
• Managing extreme liquidity stress
• Case Studies:
• How can we define and grow core loans?
• How can we define and improve deposit quality?

DAY 2

• Interest Rate Risk
• A review and reminder of the key tenets of Interest rate risk
• Interest rate metrics and profiling
• Managing Interest rate risk in the banking book (IRRBB) in practice
• Funds Transfer Pricing
• What is FTP?
• Fundamental concepts and applications
• FTP framework construction
• Pricing, profitability and incentives
• Case Study
• Balance sheet management and simulation
• Balance Sheet Management 2022/23
• Challenges and responses: use of simulation tool for optimal planning
• Introduction to the Asset and Liability Committee (ALCO) Role Play
• Asset Liability Committee (ALCO) Role Play
• Conduct, role and responsibilities of the ALCO
• Present decisions and rationale
• Scoring