Question

    The Assets Liabilities committee (ALCO) in a bank is

    primarily responsible for managing-
    A Currency risk Correct Answer Incorrect Answer
    B Market Risk Correct Answer Incorrect Answer
    C Price Risk Correct Answer Incorrect Answer
    D Liquidity Risk Correct Answer Incorrect Answer
    E Operational Risk Correct Answer Incorrect Answer

    Solution

    To assist and supervise the ALM (Asset Liability Management) unit an Asset Liability Committee (ALCO) is established. 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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