as at December 31, 2003 - EFG Bank Group
as at December 31, 2003 - EFG Bank Group
as at December 31, 2003 - EFG Bank Group
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72<br />
Notes to the Financial St<strong>at</strong>ements (continued)<br />
borrower (or group of borrowers), large<br />
exposures and country risk are monitored on an<br />
ongoing and independent b<strong>as</strong>is by the Credit<br />
Administr<strong>at</strong>ion and Control department. An<br />
internal grading system is used <strong>as</strong> a supporting<br />
tool for determining any provisioning<br />
requirement for doubtful debts on an individual<br />
b<strong>as</strong>is.<br />
Oper<strong>at</strong>ional risk<br />
Oper<strong>at</strong>ional risk is the risk of loss or business<br />
suspension resulting from failures in business<br />
processes, systems and people, or from external<br />
causes, whether accidental or deliber<strong>at</strong>e. It is<br />
limited by means of organis<strong>at</strong>ional me<strong>as</strong>ures,<br />
autom<strong>at</strong>ions, internal controls, security<br />
me<strong>as</strong>ures, authoris<strong>at</strong>ion frameworks, written<br />
procedures, legal document<strong>at</strong>ion and support,<br />
and compliance checks under the responsibility of<br />
management. In addition, a monthly oper<strong>at</strong>ional<br />
report is produced for the <strong>at</strong>tention of<br />
management.<br />
(c) Outsourcing<br />
Back offices, inform<strong>at</strong>ion technology,<br />
transactions execution and settlement, custody<br />
and corpor<strong>at</strong>e actions, electronic fund transfers,<br />
<strong>as</strong>set management, daily risk management<br />
activities, legal and compliance have been<br />
outsourced to the <strong>Bank</strong>’s Swiss subsidiary, <strong>EFG</strong><br />
Priv<strong>at</strong>e <strong>Bank</strong> SA using common oper<strong>at</strong>ing<br />
procedures with reporting lines to and distinct<br />
supervision by the <strong>Bank</strong>’s management.<br />
Salary and pension fund administr<strong>at</strong>ion have<br />
been outsourced to a third service company<br />
specialising in this area. Several IT development<br />
projects have also been outsourced to third local<br />
vendors.<br />
<strong>EFG</strong> <strong>Bank</strong> European Financial <strong>Group</strong>