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?


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

  1. liquidity risk
  2. FX risk
  3. counterparty risk
  4. 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


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