Analysis of Asset & Liability Management: The Silicon Valley Bank case

Asset Liability Management (ALM) is a critical framework for managing financial risks in the banking sector, aiming to ensure the alignment of assets and liabilities to achieve financial stability. This thesis examines Asset Liability Management (ALM) in the banking sector, focusing on its evolution, theoretical frameworks, and risk management applications. It reviews key ALM models, regulatory developments under the Basel Accords, and tools for managing interest rate and liquidity risks. A case study of Silicon Valley Bank’s 2023 collapse illustrates how poor ALM practices—particularly unhedged interest rate exposure and liquidity mismatches—can trigger systemic failures. The analysis underscores the critical role of ALM in financial stability and highlights persistent gaps in regulatory oversight.