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      Question

      Overall responsibility for management of liquidity risk

      lies with the
      A Board of Directors Correct Answer Incorrect Answer
      B Risk management committee Correct Answer Incorrect Answer
      C Asset Liability committee Correct Answer Incorrect Answer
      D Asset Liability Management support group Correct Answer Incorrect Answer
      E Audit Committee Correct Answer Incorrect Answer

      Solution

      Asset Liability Committee (ALCO) is established to assist and supervise the ALM (Asset Liability Management) unit. It has the central purpose of attaining goals defined by the short- and long-term strategic plans- •    To ensure adequate liquidity while managing the bank's spread between the interest income and interest expense •    To approve a contingency plan •    To review and approve the liquidity and funds management policy at least annually

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