Using Gap Analysis in Asset-Liability Management

Explore the essential role of Gap Analysis in Asset-Liability Management (ALM) for financial stability and profitability in our latest video. Discover the intricate balance between assets and liabilities, and the strategic importance of this analysis for banks, insurance companies, and financial institutions.
Introduction to Asset-Liability Management: Understand the foundation of ALM and its significance in managing financial risks, including liquidity, interest rates, and currency fluctuations.
The Concept of Gap Analysis: Learn how Gap Analysis serves as a crucial technique in ALM, evaluating the differences in asset and liability volumes within specific maturity buckets to manage interest rate risk effectively.
How Gap Analysis Works: A step-by-step guide on conducting Gap Analysis, from categorising assets and liabilities into time buckets to calculating and interpreting the gap for interest rate sensitivity analysis.
Interest Rate Sensitivity Analysis: Gain insights into predicting the impact of interest rate changes on a financial institution's net interest income, and understand the implications of positive and negative gaps.
For professionals in the finance sector, this video offers valuable knowledge on enhancing your institution's financial health through strategic planning and risk management. Visit our website for more insights into Asset-Liability Management practices.
#Finance #AssetManagement #LiabilityManagement #GapAnalysis #FinancialStability

[@JitendraTiwari-kl7sd]

Can you please elaborate on how liabilities' sensitivity to interest rate rise can be reduced by receiving fix and paying variable? What i understand from your example in the case is that bank is already having negative gap, meaning its already running risk of paying higher if rates go up...