A conduct and culture change programme developed with the help of outside experts has
been rolled out worldwide within Rabobank International.This programme is aimed at more
clearly treating the bank's customers fairly and strengthening the focus on integrity and
regulatory compliance. A similar conduct and culture change programme is currently being
introduced within Rabobank Nederland.
Rabobank International has critically reviewed the activities within Global Financial Markets
and will continue to do so with a view to limiting risks, including risks relating to regulatory
compliance.The bank has consequently already taken significant steps to divest certain
product groups and to withdraw from certain markets, where necessary.
Rabobank has also undertaken major investments and will continue to do so to strengthen
its activities in the field of compliance, risk management and internal audit to address
specific shortcomings identified by authorities.These efforts, which also involve outside
experts, include an emphasis on improving cooperation between risk management staff
at Rabobank Nederland and Rabobank International, a significant expansion of the number
of compliance staff and numerous systematic improvements of bank's compliance function,
as well as a refocusing of the audit function prioritising timely and effective action to follow
up on audit findings.
Rabobank has also revised its remuneration policy to reduce the emphasis on
financial targets.
Stress testing
EDTF recommendation 8 At Rabobank, stress tests form an essential part of the risk management framework. Stress tests
are used to measure the impact on Rabobank of extreme, yet plausible events. Where necessary,
measures are taken on the basis of the results of the stress tests that are in line with Rabobank's
risk appetite.
In addition to group-wide stress tests, tests are also performed for specific portfolios and risk
types. The various scenarios take account of macro-economic factors including growth,
unemployment, inflation, interest rates, share prices and real estate prices.
In 2013 Rabobank carried out two group-wide stress tests. A stress test of the Dutch Central
Bank (DNB) took place in the latter part of the year to determine the impact of a number of
external scenarios on Rabobank's capital and liquidity position. In addition, a group-wide stress
test on the basis of internal scenarios approved by DNB was carried out as part of the annual
Supervisory Review and Evaluation Process (SREP).
In the reporting year, specific portfolio stress tests were performed for the mortgage
portfolio and the real estate portfolio. The scenarios for the group-wide and specific stress
tests were constructed to measure the impact of events such as negative economic
developments in European countries and developments in the mortgage and real estate
markets in the Netherlands.
Scenario analysis is used in monthly stress tests for specific risk types to simulate the potential
impact on liquidity of a wide range of stress scenarios. This involves analysis not just of market
specific scenarios, but also of scenarios that apply specifically to Rabobank. These scenarios are
also combined in a stress scenario featuring adverse market developments as well as stress for
the Rabobank positions. In addition monthly reporting to DNB takes place on the group-wide
liquidity position on the basis of the guidelines drawn up by the supervisory authority.
67 High level of creditworthiness: risk management
