Asset / Liability Management (ALM) is a process to manage the composition and pricing of the assets, liabilities and off balance sheet exposures with the aim to control the bank’s risks (credit, market, liquidity and operations). It was ppioneered by financial institutions during the 1970s as interest rates became increasingly volatile. The process is at the crossroads between risk management & strategic planning. The central theme of ALM is the coordinated – and not piecemeal – management of a bank’s entire balance sheet. The ALM planning tool has evolved from the simple idea of maturity-matching of assets and liabilities across time buckets into a framework using sophisticated duration matching, variable rate pricing & static / dynamic simulations.