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 Asett and Liability Form 2004

2004-2025 Form

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if you work in banking you've probably heard of alm which stands for asset liability management so what is alm well let's start with the basics so a bank is a financial intermediary and it collects money from depositors to whom it pays interest and then it loans that money out to borrowers from whom it collects interest okay so that's the basic historic model of a bank and so the bank's profit is just going to be the interest that it earns from borrowers minus the interest it pays to depositors so historically what a bank would try and focus on is just obtaining funds at the lowest possible cost because if you can decrease this amount here then that is going to increase the bank's profit okay things are more complicated now okay so in the past a typical bank loans were responsible for nearly all of their revenue nowadays banks also make money from investments speculation from derivatives and other sources okay also historically banks got almost a

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