Definition of Asset Liability Management

Barrett and Thomas (in Imam Rosyamsi, 1999: 17) said that the asset liability management are:

"There is almost total agreement asset / liability management is directed at managing net interest margins and that good performance in this area is measurable by the degree to which a stable net interest margins are Achieved over time in the face of interest volatility, liquidity of this changes the financial system, and competition for credit business. These more margin ever, must not only be stable but should compare favorably in size to those of peers group of banks and, as aprecent, not be deteriorating ".

Lard (in Elli Ratnaningsih, 2003: 13) said that asset managament liability are:

"Asset liability management is the managerial process of developing and Evaluating overall objectives, policies, and strategic base upon a number of factors. These factors include the environmental condition and outlook, opportunities in the market place, risk preferences, and risk reward characteristics. The implementation of asset liabilities management policies is carried out through asset creation and funding activities ".

Slamet Riyadi (2003: 33) said that the asset liability management is: "It is a process of planning, organizing, actuating, and controlling for a capital, fund accumulation, and the use of funds. Another one related to each other in achieving an optimal level of profit with the level of the calculated risk ".
From the above description can be concluded that libility asset management is a process of asset and liabilities management in an integrated manner, to achieve sustainable advantage in situations of turbulent business environment or it can be said briefly that the asset liability management is risk management liabilities are assets of the liquidity risk, interst rate risk, foreign exchange risk, capital risk, pricing risk, and off balance sheet risk (Imam Rusyamsi, 1999: 17).

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