Chih Chen

Portfolio optimization is a more familiar tool in asset management than in commercial banking. Not because every asset manager runs a mean-variance solver as the decision engine, many do not, but because the technique is at least in the working vocabulary and, where it is used, it is used to understand a single risk-return tradeoff across one dimension: market risk on total return. The objective is intelligible, the constraints are short, the result lands in language the investment committee...

In my ALM work, I often describe gap analysis as equal parts art and science. The science is in the data, the cash flow buckets, and the duration calculations. The art is in understanding how real customers behave when the world changes around them. Stablecoins and tokenized deposits are two of those changes that are quietly rewriting the rules of balance sheet management. As we work through the actual mechanics, a complex set of trade-offs emerges. For corporate treasurers, the decision is...

Banks face significant challenges in managing liabilities without contractual maturities—such as demand deposits and savings accounts—due...