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Asset Liability Management
Asset and liability management (often abbreviated ALM) is the practice of managing financial risks that arise due to mismatches between the assets and liabilities as part of an investment strategy in financial accounting. ALM sits between risk management and strategic planning. It is focused on a long-term perspective rather than mitigating immediate risks and is a process of maximising assets to meet complex liabilities that may increase profitability. ALM includes the allocation and management of assets, equity, interest rate and credit risk management including risk overlays, and the calibration of company-wide tools within these risk frameworks for optimisation and management in the local regulatory and capital environment. Often an ALM approach passively matches assets against liabilities (fully hedged) and leaves surplus to be actively managed. History Asset and liability management practices were initially pioneered by financial institutions during the 1970s as interes ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Financial Risk
Financial risk is any of various types of risk associated with financing, including financial transactions that include company loans in risk of default. Often it is understood to include only downside risk, meaning the potential for financial loss and uncertainty about its extent. A science has evolved around managing market and financial risk under the general title of modern portfolio theory initiated by Dr. Harry Markowitz in 1952 with his article, "Portfolio Selection". In modern portfolio theory, the variance (or standard deviation) of a portfolio is used as the definition of risk. Types According to Bender and Panz (2021), financial risks can be sorted into five different categories. In their study, they apply an algorithm-based framework and identify 193 single financial risk types, which are sorted into the five categories market risk, liquidity risk, credit risk, business risk and investment risk. Market risk The four standard market risk factors are equity ri ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Chief Financial Officer
The chief financial officer (CFO) is an officer of a company or organization that is assigned the primary responsibility for managing the company's finances, including financial planning, management of financial risks, record-keeping, and financial reporting. In some sectors, the CFO is also responsible for analysis of data. Some CFOs have the title CFOO for chief financial and operating officer. In the majority of countries, finance directors (FD) typically report into the CFO and FD is the level before reaching CFO. The CFO typically reports to the chief executive officer (CEO) and the board of directors and may additionally have a seat on the board. The CFO supervises the finance unit and is the chief financial spokesperson for the organization. The CFO directly assists the chief operating officer (COO) on all business matters relating to budget management, cost–benefit analysis, forecasting needs, and securing of new funding. Qualification Most CFOs of large companies hav ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Wholesale Funding
Wholesale funding is a method that banks use in addition to core demand deposits to finance operations and manage risk. Wholesale funding sources include, but are not limited to, Federal funds, public funds (such as state and local municipalities), U.S. Federal Home Loan Bank advances, the U.S. Federal Reserve's primary credit program, foreign deposits, brokered deposits, and deposits obtained through the Internet or CD listing services. Rationale Although core deposits continue to be a key liability funding source, many insured depository institutions have experienced difficulty attracting core deposits and are increasingly looking to wholesale funding sources to satisfy funding and liability management needs. Liquidity risk Wholesale funding providers are generally sensitive to changes in the credit risk profile of the institutions to which they provide these funds and to the interest rate environment. For instance, such providers closely track the institution's financial condit ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Financial Stability Board
The Financial Stability Board (FSB) is an international body that monitors and makes recommendations about the global financial system. It was established after the G20 London summit in April 2009 as a successor to the Financial Stability Forum (FSF). The Board includes all G20 major economies, FSF members, and the European Commission. Hosted and funded by the Bank for International Settlements, the board is based in Basel, Switzerland, and is established as a not-for-profit association under Swiss law. The FSB represented the G20 leaders' first major international institutional innovation. U.S. Treasury Secretary Tim Geithner has described it as "in effect, a fourth pillar" of the architecture of global economic governance. The FSB has been assigned a number of important tasks, working alongside the International Monetary Fund, World Bank, and the World Trade Organization. Unlike most multilateral financial institutions, the FSB lacks a legal form and any formal power, given ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Shadow Banking System
The shadow banking system is a term for the collection of non-bank financial intermediaries (NBFIs) that provide services similar to traditional commercial banks but outside normal banking regulations. Examples of NBFIs include hedge funds, insurance firms, pawn shops, cashier's check issuers, check cashing locations, payday lending, currency exchanges, and microloan organizations. The phrase "shadow banking" is regarded by some as pejorative, and the term "market-based finance" has been proposed as an alternative. Former US Federal Reserve Chair Ben Bernanke provided the following definition in November 2013: Shadow banking has grown in importance to rival traditional depository banking, and was a factor in the subprime mortgage crisis of 2007–2008 and the global recession that followed. Overview Paul McCulley of investment management firm PIMCO coined the term "shadow banking". Shadow banking is sometimes said to include entities such as hedge funds, money market fund ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Certificate Of Deposit
A certificate of deposit (CD) is a time deposit, a financial product commonly sold by banks, thrift institutions, and credit unions in the United States. CDs differ from savings accounts in that the CD has a specific, fixed term (often one, three, or six months, or one to five years) and usually, a fixed interest rate. The bank expects the CD to be held until maturity, at which time they can be withdrawn and interest paid. Like savings accounts, CDs are insured "money in the bank" (in the US up to $250,000) and thus, up to the local insured deposit limit, virtually risk free. In the US, CDs are insured by the Federal Deposit Insurance Corporation (FDIC) for banks and by the National Credit Union Administration (NCUA) for credit unions. In exchange for the customer depositing the money for an agreed term, institutions usually offer higher interest rates than they do on accounts that customers can withdraw from on demand—though this may not be the case in an inverted yield cu ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Indicative Maturity Liquidity Profile
A realis mood (abbreviated ) is a grammatical mood which is used principally to indicate that something is a statement of fact; in other words, to express what the speaker considers to be a known state of affairs, as in declarative sentences. Most languages have a single realis mood called the indicative mood, although some languages have additional realis moods, for example to express different levels of certainty. By contrast, an irrealis mood is used to express something that is not known to be the case in reality. An example of the contrast between realis and irrealis moods is seen in the English sentences "He works" and "It is necessary that he work". In the first sentence, ''works'' is a present indicative (realis) form of the verb, and is used to make a direct assertion about the real world. In the second sentence, ''work'' is in the subjunctive mood, which is an irrealis mood – here ''that he work'' does not necessarily express a fact about the real world (he could be re ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Stress-testing
Stress testing (sometimes called torture testing) is a form of deliberately intense or thorough testing used to determine the stability of a given system, critical infrastructure or entity. It involves testing beyond normal operational capacity, often to a breaking point, in order to observe the results. Reasons can include: * to determine breaking points or safe usage limits * to confirm mathematical model is accurate enough in predicting breaking points or safe usage limits * to confirm intended specifications are being met * to determine modes of failure (how exactly a system fails) * to test stable operation of a part or system outside standard usage Reliability engineers often test items under expected stress or even under accelerated stress in order to determine the operating life of the item or to determine modes of failure. The term "stress" may have a more specific meaning in certain industries, such as material sciences, and therefore stress testing may sometimes have ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Schedule 1
Schedule 1 may refer to: * Schedule I Controlled Substances within the US Controlled Substances Act * Schedule I Controlled Drugs and Substances within the Canadian Controlled Drugs and Substances Act * Schedule I Psychotropic Substances within the Thai Psychotropic Substances Act * Schedule I Narcotic Drugs and Psychotropic Substances within the Estonian Narcotic Drugs and Psychotropic Substances Act * Schedule I Psychotropic Substances within the U.N. Convention on Psychotropic Substances * Schedule I Banks within the Canada Bank Act * Schedule 1 Substances within the Chemical Weapons Convention * Schedule 1 to the National Health Service (General Medical Services Contracts) (Prescription of Drugs etc.) Regulations 2004, the NHS treatments blacklist The NHS treatments blacklist is an informal name for a list of medicines and procedures which will not be funded by public money except in exceptional cases. These include but are not limited to procedures which the National I ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Basel III
Basel III is the third Basel Accord, a framework that sets international standards for bank capital adequacy, stress testing, and liquidity requirements. Augmenting and superseding parts of the Basel II standards, it was developed in response to the deficiencies in financial regulation revealed by the financial crisis of 2007–08. It is intended to strengthen bank capital requirements by increasing minimum capital requirements, holdings of high quality liquid assets, and decreasing bank leverage. Basel III was published by the Basel Committee on Banking Supervision in November 2010, and was scheduled to be introduced from 2013 until 2015; however, implementation was extended repeatedly to 1 January 2022 and then again until 1 January 2023, in the wake of the COVID-19 pandemic. The new standards that come into effect in January 2023, that is, the Fundamental Review of the Trading Book (FRTB) and the Basel 3.1: Finalising post-crisis reforms, are sometimes referred to as Basel ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Basel II
Basel II is the second of the Basel Accords, which are recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision. It is now extended and partially superseded by Basel III. The Basel II Accord was published in June 2004. It was a new framework for international banking standards, superseding the Basel I framework, to determine the minimum capital that banks should hold to guard against the financial and operational risks. The regulations aimed to ensure that the more significant the risk a bank is exposed to, the greater the amount of capital the bank needs to hold to safeguard its solvency and overall economic stability. Basel II attempted to accomplish this by establishing risk and capital management requirements to ensure that a bank has adequate capital for the risk the bank exposes itself to through its lending, investment and trading activities. One focus was to maintain sufficient consistency of regulations so to limit competitive ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
