Liquidity Risk Analyst
93% skill overlap
Your role
ALM Analyst
Full profileYour role
- L3 salary
- Not published yet
- Upcoming dated changes
- 12 changes ahead
What the role does
An ALM (asset and liability management) analyst measures and manages how a bank's balance sheet responds to interest rates and funding conditions. The role models interest rate risk in the banking book (IRRBB), including net interest income and economic value of equity sensitivities, maintains behavioural assumptions for deposits and prepayments, supports funds transfer pricing, monitors liquidity metrics such as the LCR (Liquidity Coverage Ratio) and NSFR (Net Stable Funding Ratio), and prepares the asset and liability committee (ALCO) pack.
Read a day in the life
A day in the life
The morning often starts with checking the latest balance sheet and rate data in the ALM system: new loans, deposits, hedges and the yield curves used for projections. The analyst runs or reviews the standard reports, such as net interest income projections under several rate scenarios and the sensitivity of economic value of equity, and explains changes from the previous run. Mid-morning there may be a question from treasury on how a new fixed-rate loan campaign changes the rate risk position and whether a hedge is needed. The analyst runs the scenario and shares the result. After lunch the work turns to assumptions: analysing how stable non-maturity deposits have been or how often mortgages are repaid early, and documenting proposed changes for model governance. Later the analyst prepares slides for the ALCO meeting and checks figures with the liquidity and regulatory reporting teams so that all numbers are consistent.
Levels
- L1 Starting out
- L2 Independent
- L3 Senior or specialist
- L4 Leads a team or an area
- L5 Leads the function
Full level descriptions and job titles
The EFO level names are the common scale; job titles differ between employers.
| Level | What the work looks like | Typical years | Typical job titles |
|---|---|---|---|
| L1 Starting out | Runs standard ALM and liquidity reports, checks balance sheet and rate data, explains simple movements and learns IRRBB, funds transfer pricing and liquidity rules under supervision. | 0-2 | Banks: Analyst, Junior Analyst, Associate (asset servicing), Trainee, GraduateAsset servicers: Junior, Specialist (entry), Officer |
| L2 Independent | Owns a set of ALM reports or analyses end to end, runs scenarios for treasury, prepares ALCO inputs and trains new analysts on the system and methods. | 2-5 | Banks: Analyst / Senior Analyst, AssociateAsset servicers: Specialist, Senior Specialist, Senior Officer |
| L3 Senior or specialist | Designs behavioural models and rate scenarios, analyses hedging strategies, handles regulatory and audit reviews and represents ALM in system and methodology projects. | 5-9 | Banks: Senior Associate, AVP, Assistant ManagerAsset servicers: Senior Specialist, Expert, Team Lead (small team) |
| L4 Leads a team or an area | Leads an ALM team, owns the balance sheet risk framework, limits and ALCO reporting, and is the escalation point for interest rate and liquidity risk issues. | 8-14 | Banks: VP, Manager, Senior ManagerAsset servicers: Team Lead, Manager, Head of Section |
| L5 Leads the function | Accountable for balance sheet management in a legal entity or region, sets ALM strategy and risk appetite proposals with the treasurer and chief financial officer, and reports to the board and supervisors. | 12+ | Banks: Director, Executive Director, Managing Director, Head of functionAsset servicers: Head of Department, Director |
Skills
Where the skill weights come from
Each role lists its skills with a tier and a weight. The weights of one role add up to 100 percent.
Source: the EFO role catalogue, built from the ESCO classification and reviewed by the editors.
The percentage is the skill's share of the role; the bars are drawn relative to the anchor skill, which is shown full.
Critical
- Asset-liability management and rate riskWeight 14.6%Relevant to you
- Liquidity metrics (LCR, NSFR)Weight 9.8%Relevant to you
- Basel framework and capitalWeight 9.8%Relevant to you
- Advanced Microsoft ExcelWeight 9.8%Relevant to you
Important and supporting skills 17
Important
- Treasury and cash flow managementWeight 4.9%Relevant to you
- Querying data with SQLWeight 4.9%Relevant to you
- Prudential and regulatory reporting (COREP, FINREP, US call reports)Weight 4.9%Relevant to you
- Attention to detailWeight 4.9%Relevant to you
- Risk judgment and escalation instinctWeight 4.9%Relevant to you
- Professional written communicationWeight 4.9%Relevant to you
- Data cleaning and validationWeight 4.9%Relevant to you
- Financial markets knowledgeWeight 4.9%Relevant to you
Supporting
- Descriptive statistics and distributionsWeight 2.4%Relevant to you
- Visualisation tools (Power BI, Tableau)Weight 2.4%Relevant to you
- Derivatives and how they workWeight 2.4%Relevant to you
- Stakeholder managementWeight 2.4%Relevant to you
- Working to tight deadlinesWeight 2.4%Relevant to you
- Credit risk models (IFRS 9, IRB)Weight 2.4%Relevant to you
Useful
- Python for data analysisWeight 0.8%Relevant to you
- Model validation and governanceWeight 0.8%Relevant to you
- Investigative reasoning on anomaliesWeight 0.8%Relevant to you
Processes
The work the role takes part in.
What each process covers
- Capital calculationMain
- Liquidity and balance sheet managementMain
- Prudential reportingSupporting
- Treasury and cash managementSupporting
Where the role concentrates
How AI is changing the role
Data preparation, scenario runs and standard reporting are increasingly automated, and machine learning is being tested to estimate deposit behaviour and prepayments.
Read the full assessment
Data preparation, scenario runs and standard reporting are increasingly automated, and machine learning is being tested to estimate deposit behaviour and prepayments. The European Banking Authority notes that supervisors expect such models to be explainable and well governed. The World Economic Forum Future of Jobs Report 2025 ranks analytical thinking as the top core skill. Value moves to judging behavioural assumptions, designing scenarios that capture real risks, interpreting results for treasury and the ALCO and challenging model outputs. Analysts who combine balance sheet knowledge with Python or SQL gain most.
Dated changes for this role
- Swiss SIC participants must receive instant paymentsRelevant to you
- Digital euro regulation in final negotiationsRelevant to you
- Swiss capital and liquidity ordinance changes from January 2027Relevant to you
- CRR3 output floor rises to 60 percent in 2027 and 65 percent in 2028Relevant to you
- UK Basel 3.1 rules take effectRelevant to you
Worth knowing
Salary snapshot
Salary figures are not published yet
The L3 salary range for this role, with its sources, will appear here when the salaries section opens.
Certifications
- FRM
- PRM
- CFA Program Level I
- ACCA Qualification
Concepts to know
- CET1 (Common Equity Tier 1)
- Intraday liquidity
- LCR (Liquidity Coverage Ratio)
- Model validation
- T2 (TARGET RTGS and central liquidity management)
- ALMM (Additional liquidity monitoring metrics)
- Asset and liability management (ALM)
- Asset encumbrance
All 24 concepts
- Basel III
- Behavioural modelling
- Contingency funding plan (CFP)
- Convexity
- CRR (Capital Requirements Regulation)
- Digital euro
- Duration
- DV01 (Dollar value of one basis point)
- Effective interest rate (EIR)
- Eurosystem collateral framework
- EVE (economic value of equity)
- Forecast (rolling forecast)
- FTP (funds transfer pricing)
- Hedge accounting
- HQLA (High-quality liquid assets)
- ICAAP (Internal Capital Adequacy Assessment Process)
Neighbouring roles
Roles that need many of the same skills, by weighted skill overlap, with the skills you would need to add.
Liquidity Reporting Analyst
60% skill overlap
To add: International accounting standards (IFRS), Accounting fundamentals (double entry), Control mindset (what could go wrong)
Your role
Capital Reporting Analyst
57% skill overlap
To add: International accounting standards (IFRS), Group consolidation, Accounting fundamentals (double entry)
Your role
Regulatory Reporting Analyst
57% skill overlap
To add: International accounting standards (IFRS), Accounting fundamentals (double entry), Control mindset (what could go wrong)
Your role
Credit Risk Analyst
52% skill overlap
To add: Credit analysis and creditworthiness, Financial statement analysis and ratios, Control mindset (what could go wrong)
Your role
Credit Risk Model Developer
50% skill overlap
To add: Credit analysis and creditworthiness, Financial statement analysis and ratios, Applied statistical modelling for pricing and risk (GLM, survival)
Your role
Do this job? Suggest a correction
Sources
- ESCO occupation: bank treasurer (external site)
- ESCO occupation: financial risk analyst (external site)
- Basel Committee on Banking Supervision, Basel III: The Liquidity Coverage Ratio and liquidity risk monitoring tools (external site)
- GARP, Financial Risk Manager (FRM) certification (external site)
- European Banking Authority, Special topic: artificial intelligence (external site)
- World Economic Forum, Future of Jobs Report 2025 (external site)
Asset and liability management (ALM)Asset and liability management is the management of a balance sheet's interest rate, liquidity and funding risks so that assets and liabilities fit together in maturity, currency and rate. ALM teams run the ALCO (asset and liability committee), hedging and funds transfer pricing.
IRRBB (Interest rate risk in the banking book)IRRBB is the risk to a bank's earnings and economic value from changes in interest rates on positions such as loans, deposits and hedges. Banks measure it with the economic value of equity and net interest income, and the supervisory outlier test flags outliers.
Transfer pricingTransfer pricing sets the prices of transactions between entities of the same group, such as services, loans, guarantees and intangibles. Tax rules require the arm's length principle: prices independent parties would agree. OECD guidelines set methods and documentation (master file and local file).
LCR (Liquidity Coverage Ratio)The Liquidity Coverage Ratio requires a bank to hold enough unencumbered high-quality liquid assets to cover its net cash outflows over a 30-day stress period. It must be at least 100% under the CRR and Commission Delegated Regulation (EU) 2015/61.
NSFR (Net Stable Funding Ratio)The Net Stable Funding Ratio compares available stable funding (capital and longer or sticky liabilities) with required stable funding (set by the liquidity and maturity of assets) over a one-year horizon. The minimum is 100%. It applies in the EU since June 2021 under CRR2.
SQL (Structured Query Language)SQL is the standard language for defining, querying and changing data in relational databases, standardised as ISO/IEC 9075. Analysts use it to select, filter, join and aggregate tables; it is the most requested technical skill in finance data roles.