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ALM Workshop

Why You Need Asset/Liability Management Education

Posted: Sep 22, 2021 | Author: Cornerstone League
ALM Workshops  Experiences & Events 

Margot Strong, ALM and Financial Analysis Director, Cornerstone League

Understanding the concepts of asset/liability management is key to ensuring a credit union is financially stable. If you’re new to credit unions or don’t have a thorough understanding of the ALM building-block components that work together for a successful outcome, you could be placing your credit union at risk.

Even if your job function doesn’t require you to work with ALM concepts every day, understanding how ALM works is still beneficial. And, if you participate in ALCO meetings or seek to advance to a higher position, educating yourself about ALM will be invaluable to you and your credit union. That’s why I encourage you to grow your understanding of ALM through Cornerstone’s webinars and workshops.

The Value and Convenience of ALM Education

While employees that are new to credit unions are obvious candidates for ALM education, many credit union employees that have extensive financial knowledge and schooling may not be as well-versed in the specifics of ALM for credit unions and should consider participating. The webinars and workshops focus on providing introductory ALM education so attendees gain a basic level of knowledge that they can apply to the specifics of their credit union.

Due to the pandemic, Cornerstone League has taken the two-day in-person training format and broken it into two 2-day ALM Webinars over two weeks, with each webinar lasting three hours. The webinars are also recorded, and attendees have access to the recordings for 45 days afterward to make the most of their investment.

What You’ll Learn

ALM Webinars and ALM Workshops are designed to grow your fundamental knowledge of the four goals of ALM. Whether you realize it or not, the decisions you make daily for the credit union can impact one or more of these goals:

  1. Adequate Capital
  2. Stable Earnings
  3. Sufficient Liquidity
  4. Interest Rate Risk Management

The ALM education will also help you understand several key ratios that, when monitored over time, can provide insight into how the credit union is performing. These ratios allow the board of directors and management to assess whether the credit union is on track to meet its financial goals and, ultimately, help its members. In addition, you’ll learn:

  • The components that should be included in an ALM policy and an investment policy;
  • How to perform the necessary due diligence on financial institutions and brokers that a credit union uses when placing investments; and
  • How regulators communicate and distribute their regulatory requirements of and for credit unions and why that’s important.

Successful asset/liability management is fundamental to maintain the financial stability of your credit union. For example, adequate capital is essential because it can carry a credit union through rough times; however, identifying a sufficient level of capital will be different for every credit union based on the amount of risk on its balance sheet.

Ready to Discuss ALM Education with Your Manager?

The next ALM Workshops take place in Little Rock and Oklahoma City.
Learn more.

The next ALM Webinar series take place over two days in three-hour blocks.
Learn more.

When asked which portion of the ALM education was most helpful and why, a past attendee said it well:

“Reviewing the components that contribute to each key ratio. This helps connect the dots to real-word activity the credit union is participating in so that we can update our strategy accordingly.”

I hope to see you at the upcoming ALM Webinars and ALM Workshops.

Learn more.

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