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The purpose of ALM is not necessarily to eliminate or even minimize risk. The level of risk will vary with the return requirement and entity´s financial objectives and risk tolerances but these issues are generally determined by senior management of an entity and are reviewed from time to time. In current scenario increasingly banks and asset management companies started to focus on Asset-Liability risk. The problem was not that the value of asset might fall or that the value of liabilities might rise in both the cases mechanism of risk mitigation is needed.

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