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Hidden Balance Sheet Risks Demand a Forward Looking Lens

Traditional balance sheet hedging approaches may fail to identify risks that emerge only over time. Fabien Charron argues that forward-looking risk metrics, combined with optimization tools and human judgment, can help financial institutions uncover hidden exposures and design more resilient hedging strategies.

Jul 02, 2026

Center for Financial Professionals ,

Tags: ALM, Treasury and Liquidity Risk

Hidden Balance Sheet Risks Demand a Forward Looking Lens

The views and opinions expressed in this content are those of the thought leader as an individual and are not attributed to CeFPro or any other organization

Fabien Charron argues that spot risk metrics may fail to identify future balance sheet vulnerabilities
Forward-looking risk metrics can uncover hidden exposures before they materialize
Institutions often generate large volumes of data but struggle to convert it into action
Effective hedging strategies must be actionable, timely, and flexible
Traditional hedges can solve current problems while creating future risks
Optimization tools help evaluate trade-offs between multiple objectives and constraints
AI can improve analysis and explain optimization outcomes
Human judgment remains essential to prevent unrealistic or impractical solutions

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