Risk Management Training Program
Asset Liability Management School
Program OverviewThe purpose of the Asset Liability Management School (ALMS) is to enhance the pre-commissioned examiner’s ability to analyze, assess and assign ratings for sensitivity to market risk and liquidity. This school provides comprehensive interest rate risk (IRR) analysis instruction with emphasis on evaluating IRR models. Additionally, ALMS expands liquidity analysis instruction beyond ratio analysis with an emphasis on managing liquidity risk.
Key ObjectivesUpon completion of this course, participants should be able to:
- Develop preliminary assessments of interest rate risk (IRR) from off-site analysis information such as IRRSA, SEC filings, and equity analyst reports
- Develop preliminary assessments of liquidity from off-site analysis information such as IRRSA, SEC filings, and equity analyst reports
- Analyze investment strategies
- Analyze basic hedging strategies
- Assess a bank’s exposure to interest rate risk
- Determine the adequacy of the bank ’s interest rate risk management
- Assess a bank’s exposure to liquidity risk
- Determine the adequacy of a bank ’s liquidity risk management
- Communicate your assessment of the “S” component effectively in writing
- Communicate your assessment of the “L” component effectively in writing
- Perform the ALM examination function for a financial institution up to $1 billion in assets
Instructional FormatFacilitated classroom discussion/lectures, small group activities, and in-class case study.
DurationThis is a two-week workshop preceded by approximately 40 hours of pre-course consisting of and Independent Study.
This course is designed for pre-commissioned examiners. Participants should attend this course after completing the Financial Institution Analysis School (FIAS) but before attending the Loan Analysis School (LAS). Attendance should be scheduled after the participant has had sufficient time to practice the skills acquired in FIAS and to complete the ALMS pre-course assignment.
This course is open to appropriate staff of the FDIC and partner government regulatory agencies. This course is not open to the public or staff of private banks.
PrerequisitesThe pre-commissioned examiner should have performed the following activities before attending this course.
- Completed the two previous Risk Management core schools - Introduction to Examinations School and Financial Institution Analysis School
- Reviewed and analyzed the quality of a bank's investment portfolio, including identifying investments for market risk, credit quality, accounting accuracy and investment strategies at least once
- Reviewed pre-course material related to derivatives, and preferably analyzed derivative activities and basic hedging strategies to determine suitability and risk at least once
- Analyzed a bank’s internal ALM modeling and reviewed policies and procedures related to interest rate risk and liquidity risk management.
- Reviewed and analyzed characteristics of the bank’s assets and funding sources to determine Interest Rate Risk (IRR) profile and preferably recommended risk management corrective action at least once
Pre-Course AssignmentPrior to attending the workshop, students are required to perform the following:
- Complete the Independent Study
- Complete scope comments for Sensitivity to Market Risk and Liquidity
The Division of Risk Management Supervision (RMS) has authorized up to 40 hours of official time for completion of the pre-workshop materials.
Special RequirementsParticipants need to bring a laptop computer and a Hewlett Packard 12-C or comparable financial calculator.
Post Course RecommendationAs soon as possible after attending the course the participant should perform the ALM examination function for a financial institution close to $1 billion in assets if possible.
Post Course FeedbackWritten assessment of the participant's performance is submitted to each participant's field supervisor or district office approximately 30 days after the conclusion of the school.
CreditsContinuing Education Unit (CEU): 3.3
Continuing Professional Education (CPE): 83.5
For information regarding administrative policies such as complaints and refunds, please contact Corporate University, Attn: NASBA Representative Ava Livas, Room A-3025, 3501 North Fairfax Drive, Arlington, VA 22226 (703) 562-2463.
FDIC is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have the final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.learningmarket.org.
The FDIC has been approved as an Authorized Provider by the International Association for Continuing Education and Training (IACET) (www.iacet.org), 1760 Old Meadow Road, Suite 500, McLean, VA 22102.
For more information concerning course content and administration, please contact Senior Bank Examination Training Specialist Dan Hotz at (703) 516-1266 or Training Technician Erika Joseph at 703-516-5333.