EUR 3000000000 debt issuance programme, 10 ... - Volksbank AG

aries, such as clearing agencies, clearing houses, banks, securities firms and exchanges, with which the
Group interacts on a daily basis. The occurrence of any of these events or a combination thereof could have
a material adverse effect on VBAG.
VBAG is subject to liquidity and market risks
Since the beginning of the global “credit crunch”, in August 2007 and in light of the most recent events in
the international financial markets, many financial institutions around the world have experienced great
difficulty in obtaining funding. The resulting lack of liquidity in the global financial markets may have a
significant adverse effect on financial institutions, including VBAG.
There is a risk that a rating agency may suspend, downgrade or withdraw any rating assigned to
VBAG and, as a result, the market value and trading price of the Securities may be adversely affected.
Any rating assigned to VBAG indicates, inter alia, the risks relating to the VBAG’s ability to fulfil its obligations.
A rating reflects a rating agency's opinion on the credit standing of an issuer, i.e., a forecast and/or an indicator
of a possible credit loss due to insolvency, delay in payment or incomplete payment to investors. It is
not a recommendation to buy, sell or hold securities. The rating agency may in particular suspend, downgrade
or withdraw a rating at any time. Such suspension, downgrading or withdrawal may have an adverse
effect on the market value and trading price of the Securities. A downgrading of the rating may also lead to
a restriction of the access to funds and, consequently, to higher refinancing costs of VBAG.
VBAG is subject to the risk of losses arising from changes of market prices (market risk).
The market risk is the risk of loss arising from a change of market prices in particular due to changes of
interest rates, share prices, commodity prices and foreign currency as well as price fluctuations of commodities
and derivatives. This risk encompasses both trading book and banking book positions. Positions of
risk are the result either of business positions taken for or in respect of customers, or of a deliberate assumption
of such positions.
VBAG's market position is influenced by both external factors such as customer business and internal deliberate
positions. No assurance can be given that changes in the market will not adversely affect VBAG's
profitability.
Losses due to any inadequacy or failure of internal proceedings, people, systems, or external events,
whether caused deliberately or accidentally or by natural circumstances (operational risk) may adversely
affect VBAG.
VBAG is exposed to various risks due to potential inadequacies or failures of internal controls, proceedings,
people, systems, or external events, whether caused deliberately or accidentally or by natural circumstances,
and which may cause material losses. Such operational risks include the risk of unexpected losses
incurred as a consequence of individual events resulting, among other things, from erroneous information
systems, inadequate organisational structures or ineffective control mechanisms. Such risks also include the
risk of cost increases or profit losses due to unfavourable overall economic or trade-specific trends. Any
reputational damage to VBAG as a result of the occurrence of one of these events also falls into this risk
category.
The operational risk is inherent in all activities of VBAG and cannot be eliminated. In particular, investors
should be aware that VBAG, like other banks, is increasingly dependent on highly sophisticated information
technology ("IT") systems. IT systems are vulnerable to a number of problems, such as computer virus
infection, malicious hacking, physical damage to vital IT centres and software or hardware malfunctions.
With a view to minimising the probability of the materialisation of an operational risk, a periodical supervision
and reporting system has been introduced. In addition, operational risks are addressed by means of
standardised proceedings that seek to represent the risk comprehensively and realistically. It can, however,
not be guaranteed that such measures and procedures will be effective or successful.
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