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Article
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 hidde
Jul 02, 2026
Center for Financial Professionals ,
Tags:
ALM, Treasury and Liquidity Risk
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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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