currency exchange rate movements. The latter is done via the components of the Tier I and
Tier II capital that do not form part of the reserves, in particular Trust Preferred Securities.
These were issued in selected foreign currencies in 2003 and 2004, and in such a way as to
ensure that the currency composition of the total of Tier I and Tier II capital corresponded
with that of the risk-weighted assets. This 'natural hedge' was realised by issuing the Trust
Preferred Securities, which form part of the Tier I capital, in US dollars (USD 3,250 million),
Australian dollars (AUD 500 million) and pounds sterling (GBP 350 million).
82
Rabobank Group Annual Report 2007
