Asset and Liability Management $($ALM$)$ includes the allocation and management of assets, equity, interest rate and credit risk management including risk overlays, and the calibration of company$-$wide tools within these risk frameworks for optimization and management in the local regulatory and capital environment.

Required: A$.$ Identify and discuss the reasons financial assets are a crucial aspect of financial institutions and why treasurers of these institutions are encouraged by respective regulators to hold both assets and liabilities. $[10$ Marks$]$

B$.$ Explain how operational risk affects the operational efficiency of treasury units and outline measure available to mitigate its effects. $[10$ Marks$]$