Successful Bank Asset/Liability Management

Two "virtuosos of risk management" show you how to close up theholes in your gap defenses--before the regulators call! BankersMonthly dubbed them "virtuosos of risk management.[who have] raisedA/L management to an art." And this hands-on approach toasset/liability management from Bitner and Goddard is exactly whatyou'd expect from such banking leaders. It's the first true actionbook in the field moving beyond simple gap analysis, theory, andfundamentals to show you how to apply the full range of today'ssophisticated A/L management techniques--and comply with the latestbanking regulations. You'll find.
* Full discussions of interest rate exposures not measured by gap,but of vital interest to institutions and regulators alike: basisrisk (the difference in the change of interest rates betweeninstruments of identical maturities) and imbedded options (loanpayoffs and early deposit withdrawals)
* Helpful and informative insights from leading A/L managementpractitioners, consultants, and software developers
Whether you're involved with a commercial bank, savings and loanassociation, or credit union, you can't afford to ignore the gap inyour institution's risk defenses any longer. Put the "virtuosos ofrisk management" to work today. Forming an Asset/Liability Committee.

Selecting and Implementing an Asset/Liability Model.

Developing an Asset/Liability Management Policy.

Identifying and Measuring the Risks.

Managing Interest Rate Risk.

Interest Rate Forecasting.

Conducting a Self-Analysis.

Asset/Liability Management in Action.

Words of Wisdom.

Glossary.

Index. About the authors JOHN W. BITNER is a Senior Vice President and Chief Investment Officer of Eastern Bank. As cochair (with Robert A. Goddard) of Eastern's asset/liability committee, he has developed strategies and executed programs which have enhanced overall bank profitability. ROBERT A. GODDARD is a Senior Vice President and Chief Financial Officer of Eastern Bank. He is responsible (along with John W. Bitner) for many of the innovative and effective A/L management programs in place at Eastern. If your institution’s like most and your gap position (the difference between the repricing periods of a bank’s assets and liabilities) is the only interest rate risk you currently measure—then you should be warned: the regulators are coming. New banking regulations require that you keep a close eye not only on gap, but also on other key risks, less obvious on the balance sheet, such as basis risk and imbedded options. Simple gap analysis just isn’t enough anymore. And that’s just the beginning of what regulators are now asking for. But—even though the array of available sophisticated simulation models and financial tools is bewildering—you needn’t worry, thanks to this remarkable how-to guide from two leading authorities of the asset/liability management world. Step by step, Bitner and Goddard take you through a…

• Concise history of asset/liability management science since the early ’80s to help orient newcomers to the field
• Comprehensive guide to jump-starting an asset/liability management program, including organizing an A/L management committee, writing an interest rate management policy (that states your interest rate risk exposure parameters), and selecting the best risk modeling system
• Comprehensive arsenal of techniques for identifying, measuring, and managing interest rate risk, including critical forecasting and self-analysis methods that ensure your institution stays on track
• Total framework for integrating your asset/liability management processes and putting them into action
• Helpful section of advice and insights from leading A/L management practitioners

With a record number of failed or failing banks and thrifts on their hands, the regulators’ vigilance has never been greater. That’s why your financial institution needs to identify and measure the impact of a broad range of interest rate movements on its earnings and net value—and why you need Successful Bank Asset/Liability Management. Two "virtuosos of risk management" show you how to close up the holes in your gap defenses—before the regulators call! Bankers Monthly dubbed them "virtuosos of risk management…[who have] raised A/L management to an art." And this hands-on approach to asset/liability management from Bitner and Goddard is exactly what you’d expect from such banking leaders. It’s the first true action book in the field moving beyond simple gap analysis, theory, and fundamentals to show you how to apply the full range of today’s sophisticated A/L management techniques—and comply with the latest banking regulations. You’ll find…

• Full discussions of interest rate exposures not measured by gap, but of vital interest to institutions and regulators alike: basis risk (the difference in the change of interest rates between instruments of identical maturities) and imbedded options (loan payoffs and early deposit withdrawals)
• Helpful and informative insights from leading A/L management practitioners, consultants, and software developers

Whether you’re involved with a commercial bank, savings and loan association, or credit union, you can’t afford to ignore the gap in your institution’s risk defenses any longer. Put the "virtuosos of risk management" to work today.