Reaping integration rewards

In the October issue of Risk, Clive Davidson discussed the integration of ALM and ERM technology. Here, in a second article, he profiles the firms that have tackled this project and reviews the challenges, advantages and pitfalls of the integration process.

Combining the hitherto separate functions of asset and liability management (ALM) and enterprise risk management (ERM) is increasingly being seen as a way of providing a consolidated view of risks across a bank’s whole enterprise – banking and trading books. Proponents say the technique will enable banks to make risk-adjusted decisions on capital allocation, the pricing of products, the viability of new ventures and other strategic issues.

Methodologies have evolved that facilitate this

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