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Article: Balance sheet management. (risk management and resource allocation)
- Article from:
- Risk Management
- Article date:
- July 1, 1993
- Author:
CopyrightCOPYRIGHT 1993 Risk Management Society Publishing, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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But it is instructive to examine what has happened to the balance sheet-how it has been transformed from a relatively simple and even elegant summary of the condition of a financial institution to a kaleidoscopic, dynamic document that needs to be viewed in at least three dimensions: to capture what's on, what's off, and what's behind it. We need to read above, below, and between the lines of the balance sheet today to get the full story of what kind of shape a bank is in and what kind of risks it faces.
When Lew Preston, my predecessor at Morgan, retired a few years ago, we gave him two balance sheets, framed side by side-one from 1951, when he joined Morgan, ...