Annual Report 2012 - Bank Sarasin

5. Risk management
Structure of risk management
General considerations
Assessing and taking risks is in the nature
of banking. For this reason, a clearly
defined, transparent and integrated risk
management policy is adopted for all
divisions and is adapted continuously to
the latest knowledge. Substantial human
and technological resources are made
available for this purpose. Active risk
management should make it possible to
minimise undesirable risks and to make
optimum use of the Bank’s capital for the
benefit of all shareholders. The change of
majority shareholder from Rabobank to J.
Safra Sarasin Holding Ltd also had a
major impact on risk controlling and
limitation, especially with respect to the
market, credit and liquidity risks.
Risk culture
The standard of risk management
achieved by a financial institution is not
simply a question of compliance with
formalised internal and external rules. Of
equal, if not even greater, significance is
the risk awareness of decision-makers.
The quantitative criteria on which attention
frequently centres are only one component
of a comprehensive risk management
system. The development of an
appropriate risk culture as part of a
financial institution’s overall culture is just
as important. A central element of such a
risk culture is the discipline and
thoroughness with which participants
respond to their tasks in the risk
management process. Integrity, risk
awareness on the part of everyone
concerned at all levels of Bank Sarasin as
well as clearly defined responsibilities and
competencies are the pillars that support
Sarasin’s risk culture.
Organisation of risk management
The Board of Directors has performed
adequate and regular risk assessments
and introduced any remedial measures
required to minimise the risk of material
misstatement in the financial statements
as far as possible.
Furthermore the Board of Directors is
responsible for the formulation and
implementation of the Group’s risk policy.
It lays down the risk strategy, the
organisational framework for risk
management such as limits and systems,
the maximum risk tolerance and
respective responsibilities. The risk policy
is reviewed annually to ensure its
appropriateness.
The CEO and the Executive Committee are
responsible for implementing the risk
management and risk controlling
principles approved by the Board of
Directors. They are supported by the
various committees. The Risk Committee
carries out a comprehensive assessment
of all the Bank's principal risks, both
current and those anticipated in future.
The CFO chairs the Risk Committee,
whose members include the CEO, the
division heads for Trading & Family
Offices, Asset Management, Products &
Sales and Logistics, the market heads for
the Middle East and Asia, and the heads
of the Risk Office and Legal &
Compliance. When evaluating risk, it takes
into consideration the findings and
measures of the other committees. The
Central Credit Committee (CCC) is in
charge of managing counterparty risk. The
Treasury Committee controls and
manages interest rate risk, short-term
liquidity risk and mid to long-term
refinancing risk throughout the Group on
an operating basis.
During the course of the fourth quarter a
new body, the Investment Committee, was
set up to deal with the strategic aspects
of balance sheet management. The tasks
of this committee also include assessing
counterparty risks resulting from the
Treasury Bond Portfolio. This committee is
composed of top divisional management
and staff from the various specialist areas
concerned and meet at regular intervals.
The Risk Committee and the Central
Bank Sarasin & Co. Ltd, Annual Report 2012 | 64