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What is an ALM strategy?

Asked by Anonymous Sep 02, 2026 0 views 1 answers
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Answered Sep 02, 2026

An Asset-Liability Management (ALM) strategy is a comprehensive financial framework utilized primarily by banks, insurance companies, and pension funds to coordinate the management of assets and liabilities. The core objective is to match the maturity, cash flow timing, and interest rate sensitivities of assets against obligations, ensuring the institution maintains sufficient liquidity, minimizes financial risk, and protects net interest margins across varying economic cycles.

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