Directors reviewing their bank’s asset/liability management policy in the wake of recent bank failures should avoid merely reacting to the latest crisis. Managing the balance sheet has come under a microscope since a run on deposits brought down Silicon Valley Bank, the banking subsidiary of SVB Financial Group, and Signature Bank, leading regulators to close the two large institutions. While most community banks do not have the same deposit concentrations that caused these banks to fail, bank boards should ask their own questions about their organization’s asset/liability strategies. A bank’s asset/liability management policy spells out how it will manage a...