FRSGlobal, a provider of risk reporting and regulatory reporting compliance solutions on a unified platform with coverage for over 40 countries, has released a configurable asset & liability management (ALM) solution for US banks.
FRSGlobal said that the ALM solution is flexible and firms can begin to manage their ALM risk using a various methods, including dynamic simulation modelling and stress testing, by following a logical and well defined six step process.
The FRSGlobal ALM solution enables banks to put in place sound practices and processes to manage their ALM and liquidity risk that are in line with the US interagency guidelines issued on March 17, 2010.
The guidance outlines the process that financial institutions should follow to identify, measure, monitor, and control their funding and liquidity risk. The guidance emphasizes the importance of cash flow projections, stress testing, and a well-developed contingency funding plan for measuring and managing liquidity risk.
Richard Ferrari, vice president of Americas at FRSGlobal, said: “In light of the recent financial crisis US banks are re-evaluating the way that they currently model their ALM risk. Many small and mid-size banks are currently outsourcing their analysis of ALM risk to an advisory firm or using internally developed Excel spreadsheets. They are finding that these methods are not adequate given the increased rigor and frequency that the regulators expect for the analysis of ALM risk.”