For years, DCG has met and exceeded ALM regulatory guidelines.
DCG has continuously spoken at industry seminars about what constitutes a high-performing ALCO. DCG has always urged a “Wholistic” approach that focuses on strategy development for improved financial performance and, as a by-product, provides the documentation and reports necessary for the regulators.
This focus on strategies has always demanded rigorous data and modeling standards, a thorough assumptions process and more effective documentation than what traditional ALM software models generated.
The detailed regulatory positions released on IRR, liquidity and model risk since 2010 require that many institutions enhance their ALM process. This expectation is often referred to as the new norm in balance sheet management. But at DCG, it is something we have been practicing for years, and it helps clarify “Wholistic” ALCO.
“Wholistic” ALCO should not be a burden. In an era where margins will remain tight, such a process will be a business necessity in order to optimize your financial position while balancing increased demands from the regulators. What used to be a best practice is now today’s new normal.