ALM Solutions, 2024
In 2024, monetary tightening, duration risk and liquidity crises continue to drive the re-evaluation of asset and liability management (ALM) strategies and risk management practices. Our 2023 report, launched in the aftermath of the international banking crisis, examined the implications of the Silicon Valley Bank incident, which highlighted how duration mismatches and rising interest rates can dramatically erode asset values and trigger liquidity shortages. In the context of ongoing interest rate volatility, firms must anticipate and address these risks while managing interest rate sensitivity and navigating the impact of shifting net interest income and the economic value of equity. Against this background, Chartis has identified several key trends in the market, including the increased integration of derivatives pricing, a focus on liquidity management, and the importance of interest rate simulation.
This report tracks the ALM market during a period of heightened monetary uncertainty that is significantly impacting banks’ ALM strategies. To accurately reflect the vendor market and end-user requirements in our quadrant and scoring criteria, it introduces two new quadrants: hedging and risk management; and financial planning and budgeting.
