annual report - Hypo Real Estate Holding AG

Group Accounts
3. Risk Management
1. Risk Management Structure
The prudent taking of risk is fundamental to the business of DEPFA. The primary objectives of risk management are
to protect the financial strength and the reputation of the Bank, while looking to ensure that capital is well deployed
to support business activities and grow shareholder value.
Throughout 2007, the Group maintained a comprehensive system for identification, measurement and control of
risk as an integral part of its business.
DEPFA Risk Governance Structure (effective January 2007 to October 2007)
In October 2007, DEPFA BANK plc became a wholly-owned subsidiary of Hypo Real Estate Holding AG. Prior
to the acquisition of the Bank by Hypo Real Estate Holding AG in October 2007, the Bank’s Risk Governance
structure included the following key Board and executive committees:
Risk Committee of the Board of Directors
Chaired by Dr. Thomas Kolbeck, the Non-Executive Vice-Chairman of the Board.
Objectives: responsible for DEPFA’s risk policy statement and provides strategic direction in relation to the nature
and scale of risk that the Group may assume.
In addition to the Risk Committee, the Board of Directors had established an Audit Committee and a Compen -
sation Committee. These committees were comprised of Non-Executive Directors. The Board of Directors is responsible
for the overall Group strategy.
Additionally, the following executive committees were in place:
Executive Committee
The Executive Committee is responsible for the cross functional management of the Bank. It is responsible for
implementing strategies and controls and cross functional coordination.
Asset & Liability Committee
The Asset & Liability Committee implements the market risk and liquidity strategies of the Bank and allocates
capital by setting related risk limits. It is responsible for managing interest rate and liquidity risk, and minimising
funding costs.
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