Risk and Capital Committee
The role of the Risk and Capital Committee is to support the Board in its risk management work. However, the Board has ultimate responsibility for the risks taken by the bank and for assessing its capital requirements. The Board ensures that operational risks are identified and defined and that risk-taking is measured and controlled according to current laws and the Group’s policies on risks and capital. Through the risk and capital policy, the Board establishes guidelines for the CEO regarding risk control and management, risk and capital evaluation, and capital management within the bank. The policy describes the connection between risk and capital as well as how risk and capital management support the business strategy. The Committee’s role is to prepare cases in these areas for resolution by the Board. In addition, the Committee recommends strategies in risk areas for resolution by the Board. The Committee monitors, prepares and decides, where appropriate, the following areas:
- Market risk
- Credit risk
- Liquidity and funding (e.g. limits on liquidity risk)
- Capital (e.g. monitoring the capital base, risk-weighted assets and related control models)
The Risk and Capital Committee consists of not more than five members appointed from among the Board’s members. The CEO is not a member of the Committee, but normally attends the Committee’s meetings. If any of those present expresses reservations about a decision, it is referred to the Board for a ruling.
When electing members of the Committee, special consideration is given to competence and experience with risks.
For information on the members of the Committee, see pages 162–165.
Issues in 2010
- Internal Capital Adequacy Assessment Process (ICAAP)
- Stress tests conducted on various loan portfolios
- Funding related issues
- Capital related issues