8

Asset and liability management

We have already examined lending and other asset management from the perspective of individual deals. Now we turn to bankers considering the overall approach to managing the bank’s assets.

Likewise, when it comes to selecting the appropriate mixture of funding types we need to take an overview of the bank’s approach, rather than the details of individual transactions.

The final topic dealt with in this chapter is off-balance activities, ranging from derivative position risks to bank guarantees which create problems for the bank if contingent events occur, such as a customer failing to pay a supplier.

Asset management

In managing a bank’s assets the senior team must balance out the three factors shown in ...

Get FT Guide to Banking now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.