annual report - Hypo Real Estate Holding AG
annual report - Hypo Real Estate Holding AG
annual report - Hypo Real Estate Holding AG
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Group Accounts<br />
HRE Group Risk Governance Structure (effective October 2007 to December 2007)<br />
Since the acquisition of DEPFA BANK plc by <strong>Hypo</strong> <strong>Real</strong> <strong>Estate</strong> <strong>Holding</strong> <strong>AG</strong> in October 2007, DEPFA’s risk<br />
management structure has been consolidated into the HRE Group risk management structure. The HRE Group risk<br />
governance structure includes the following key committees:<br />
Group Management Board<br />
The Group Management Board is the decision making body for all strategic and operational decisions.<br />
With regards to risk management, it is responsible for:<br />
Ensuring the proper organisation of credit business (and for the ongoing development of such organisation) as<br />
well as for the proper management and monitoring of the risks arising from credit business<br />
Defining, communicating and reviewing business and risk strategies (based on ICAAP calculations), setting the<br />
frame for all entities in HRE Group taking on credit risks, approving risk strategies and portfolio guidelines. The<br />
Supervisory Boards regularly review the strategies and the risk profile of HRE Group<br />
Approving Credit Authority guidelines setting the frame for every decision required along the credit process chain.<br />
Based on the Credit Authority guideline, individual authorities are assigned as personal credit authorities according<br />
to individual qualification, experience and training<br />
Deciding on strategies concerning market and liquidity risk as well as performance developments in Capital<br />
Markets, Treasury, refinancing business and asset liability management. It acts as point of escalation in combination<br />
with Group ALCO for controversial issues concerning processes as well as for basic principles regarding<br />
asset-liability-management, funding and liquidity management.<br />
Group Risk Management Committee<br />
This committee is the main risk decision making group and is chaired by the Group Chief Risk Officer. It has the<br />
following objectives:<br />
Reviews the overall risk situation of the Group and approves the ICAAP calculation<br />
Reviews the divisions’ credit portfolios, the Group’s country risk exposure and the Group’s market and liquidity<br />
risk exposure<br />
Discusses the Group’s risk position in the context of market developments<br />
Proposes sub-portfolio strategies on risk/return basis to Management Board (Active Credit Portfolio Management<br />
– ACPM)<br />
Proposes Group-wide and divisional (credit) risk strategies and guidelines (<strong>annual</strong>ly) to Management Board<br />
Approves limits, e.g. country risk, credit and market risk limits<br />
Approves principles for managing Credit, Country and Market Risk<br />
Approves new concepts regarding methods for risk measurement or the implementation of regulatory<br />
requirements. In combination with Group ALCO decides whether to start business in new product groups, new<br />
business units and/or markets where the risk profile (including reputational risks) possibly has an impact on the<br />
whole HRE Group. It also defines minimum requirements for new product processes.<br />
Reviews the Group’s operational risk profile<br />
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