Asset Liability Management (ALM) includes effective liquidity management. One way of assessing a bank’s exposure to liquidity risk is to consider the gaps that exist between its assets and liabilities for pre-defined time buckets, and then calculate the cost that would be incurred to close
This book falls into the category of MUST READ especially for financial market participants, risk managers and those responsible for risk assessment. A page turner no doubt for its clear and non-mathematical narrative, but a thought provoking book too whose objective appears to be the fostering of a healthy debate on the relevance of existing market behavior models. It advocates deeper thought about their use rather than the blind faith currently accorded to them.