Banking is predominantly about managing a multitude of different risks.The Rabobank Group has opted for a modest risk profile and, consequently, an even and gradual develop ment of its financial performance. Bad debts Balance sheet and Risk Management Committee Credit risk 56 Rabobank Group Annual Report 2002 Risk management The year under review was characterised by the development and implementation of methods and techniques for translating the vari ous risk categories into a single heading: economic capital. Banks hold capital in order to cope with unexpected losses.The economic capital is a measure of how much capital a bank should hold on the basis of its risk profile and desired credit rating. Since the Rabobank Group has the highest rating, the bar has been raised high. services. It therefore pursues a prudent acceptance policy. Once granted, loans are carefully managed so that there is a continuous insight into credit risks.48% of Rabobank Group's credit portfolio consists of loans to private individuals, which have a very low risk profile in relative terms.The remaining 52% is a highly diversified portfolio of loans to business clients in the Netherlands and abroad. In the year under review, new methods were developed for quanti fying credit risks, in connection with the bank supervisors' future more stringent requirements. The development of bad debts can be seen from movements in the value of amounts receivable as a percentage of the loans granted to the private sector by the Rabobank Group. Within the Rabobank Group, the Balance Sheet and Risk Management Committee (BRMC) is responsible for balance sheet management, risk policy, setting risk measurement standards, broadly determining limits and monitoring developments.The Rabobank Group has extensive procedures in place for systematic risk management. Policy on credit risk puts the clients' interests first.The Rabobank Group's aim is to offer clients the greatest possible continuity in its

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Annual Reports Rabobank | 2002 | | pagina 58