Contents Introduction Management report Appendices Corporate governance Consolidated Financial Statements Company Financial Statements
Rabobank applies concentration risk mitigation, for example for
certain asset classes and at the sector and country level.The risk
appetite determined for Rabobank's asset classes is expressed in
exposure, percentage of defaults and loan impairment charges.
Furthermore, exposure limits apply at the sector and country
level. Single-name concentrations are limited on exposure and
loss at default (LAD) and are monitored closely.
Rabobank uses the Basel II default definitions to identify a loan
impairment allowance.
Operational Risk
Operational risk is defined as the risk of financial losses or
reputational damage resulting from inadequate or failed
internal processes, people and systems (and includes tax and
law-related risks), or from external events. Operational risk is
integral to doing business. Our Operational Risk Management
(ORM) is aimed at achieving a healthy balance between risk
exposure and risk management tools. ORM identifies, measures,
mitigates and monitors operational risk, while promoting risk
awareness and a healthy risk culture within the bank. Risk
quantification and awareness helps management to set clear
priorities in their actions and allocation of people and resources.
The primary responsibility for the management of operational
risk (including IT Risk and Business Continuity) lies within the
business, where attention to managing it must be integrated
in their strategic and day-to-day decision-making. Risk
management committees have an important role in identifying
and monitoring the operational risks for each entity.The Risk
Management teams support entity-level committees with
oversight, tools, expertise and challenge to the group entities
and transparency throughout the group and towards senior
management.
The earlier mentioned Risk Control Framework (RCF) is the
most relevant development in the Operational Risk framework
to enhance organisation-wide risk and control activities. This
multiyear project is nearing its completion by the end of 2018.
There are still some teething problems, as is understandable
going from a decentralised to a much more globally managed
organisation. Once firmly embedded, this systemic, consistent
approach, globally, to manage and control operational risk and
compliance with simple policies and standards and one tool
(Archer), RCF will drastically improve businesses' running and
controlling their activities.
Compliance
All our activities must be carried out with honesty, sincerity,
care and reliability, and comply with relevant laws, regulations
and Rabobank's Code of Conduct. It is essential that we act with
integrity. All our stakeholders count on this.
The compliance teams across the globe are catalysts,
supporting all entities within Rabobank Group to live and
breathe the desired culture and showing the right behaviour.
Acting with integrity and adherence to relevant laws and
regulations is a responsibility of all employees of Rabobank.
Compliance amongst others provides oversight, policy support,
expertise and countervailing power to senior management and
employees, throughout all group entities.
We focus on the following compliance themes: treating
customers fairly, market abuse, data privacy, conflicts of interest,
anti-fraud -corruption, anti-money laundering (AML)/ counter
terrorist financing (CTF) and economic sanctions. By managing
these themes, we also focus on conduct (behaviour) risk.
In 2017, Rabobank re-organised its Compliance function,
to better align with the bank's organisational structure and
prepare for (future) changes stemming from the bank's digital
transformation programme.
Integrity Trust
Treating customers fairly is at the very heart of our mission
statement. It is Rabobank's ambition to provide customers
with the best possible service, while exercising due care.The
ongoing assessment of suitability of products and services
provided to our clients is pivotal for long term client value
creation and in the end to the performance of our bank.
Compliance function
Compliance, as part of the second line of defence, has an
important role to play in achieving and maintaining integrity and
trust. Compliance helps the organisation effectively managing
the compliance risks by setting policies and standards, advising
the business, sharing knowledge, monitoring adherence and
being the centre of expertise for the above mentioned
compliance themes. Compliance has a responsibility with
regard to risk awareness and education on the compliance
topics, either as part of the Rabobank wide training programme
(RaboRight) or through specialised training programmes.
The new Compliance organisation includes three advisory
teams, each focussing on a specific part of our business. In
addition, a specialised team was formed to ensure global
oversight on AML/CTF and adherence to international
economic sanctions.
Compliance risks
In 2017, Rabobank conducted a Systematic Integrity Risk
Analysis (SIRA), enabling an integrated view on the level
of compliance risks pertaining to the organisation as well
as the level of effectiveness of the risk control framework.
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