I know that the treasury manages and controls the bank's capital. While the Asset-Liability Committee deals with the assets and liabilities in order to stay solvent, right?
What are the similarities and differences between the two?
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Someone could write a book about this question which still wouldn't cover all considerations. However from a high-level perspective, I would say that TR handles a lot of cross-functionialities with a main focus on risk mitigation, like especially
- liquidity risk
- FX risk
- counterparty risk
- interest rate risk
and most of the times TR also covers the pricing for financial assets (loans, bonds, tender, etc.) on a national bank / central bank level.
Whereas ALCO focuses more on structuring assets & liabilities, ensuring the fulfillment of regulatory figures like core capital ratio, etc.
So they earlier or later will have a lot if interfaces but still their very own tasks and responsibilities.
Side Note: I work in treasury myself (corporate side) and used to work for banks close to 10 years as well
