SEC Form 20-F - Deutsche Bank Annual Report 2012

Deutsche Bank
Annual Report 2010 on Form 20-F
Item 11: Quantitative and Qualitative Disclosures about Credit, Market and Other Risk 136
— The Bank Risk Committee (newly established in 2010), which advises Postbank’s Management Board with
respect to the determination of overall risk appetite and risk allocation.
— The Credit Risk Committee, which is responsible for limit allocation and the definition of an appropriate limit
framework.
— The Market Risk Committee, which decides on limit allocations as well as strategic positioning of Postbank’s
banking book and the management of liquidity risk.
— The Operational Risk Committee which defines the appropriate risk framework as well as the capital allocation
for the individual business areas.
Risk and Capital Strategy
The risk and capital strategy is developed annually through an integrated process, led by the Legal, Risk &
Capital function together with the group divisions and the Finance function, ensuring Group-wide alignment of
risk and performance targets. The strategy is ultimately presented to, and approved by, the Management Board.
Subsequently, this plan is also presented to, and discussed with, the Risk Committee of the Supervisory Board.
Our risk appetite is set for various parameters and different levels of the Group. Performance against these
targets is monitored regularly and a report on selected important and high-level targets is brought to the direct
attention of the Chief Risk Officer, the Capital and Risk Committee and/or the Management Board. In case of a
significant deviation from the targets, it is the responsibility of the divisional legal, risk & capital units to bring
this to the attention of their superiors and ultimately the Chief Risk Officer if no immediate mitigation or future
mitigation strategy can be achieved on a subordinated level.
Amendments to the risk and capital strategy must be approved by the Chief Risk Officer or the full Management
Board, depending on significance.
At Postbank, similar fundamental principles are in place with Postbank’s Management Board being responsible
for Postbank’s risk profile and risk strategy, and regularly reporting thereon to the Supervisory Board of Postbank.
Starting in 2011, Postbank’s capital demand is reflected in the consolidated Group’s risk and capital strategy.
Categories of Risk
As part of our business activities, we face a variety of risks, the most significant of which are described further
below in dedicated sections, starting with credit risk. These risks can be categorized in a variety of ways. From
a regulatory perspective, we hold regulatory capital against three types of risk: credit risk, market risk and operational
risk. As part of our internal capital adequacy assessment process we calculate the amount of economic
capital that is necessary to cover the risks generated from our business activities. We also calculate and monitor
liquidity risk, which we manage via a separate risk management framework.