Customer Reviews

Asset And Liability Management: The Banker's Guide to Value Creation And Risk Control (Financial Times Series)

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This is not a manual on ALM, nor does it pretend to be a treatise on the subject. It is a very simple introduction to ALM for those who require some understanding of the basic processes undermining modern ALM within Banks (and I suppose other financial institutions where Asset & Liability Management is a requirement).

Let me be clear here, if you think this is a textbook on ALM, you would be sadly mistaken. If the cartoons on every page aren't a giveaway, then perhaps the 3-4 pages devoted to Interest Rate Risk or Liquidity risk might give you some idea of how light the treatment is.

I think Dermine pitched the book too low, I mean do we really need cartoons in a book about financial risk management for banks? What was irritating as well was that the formulae were for the most part not generalized. So you had a worked example, but there was no abstraction to the general. I'm not saying that the general should have been derived and then proven, just that the general formula should have been presented so that you could apply it in other situations.

I find it hard to recommend this book. If you need to understand some of the concepts at a pretty high level, then maybe it might be useful. But if you are looking for a real treatment of ALM, then I suggest you look elsewhere.