COMMERZBANK AKTIENGESELLSCHAFT

To our Shareholders Corporate Responsibility Management Report Risk Report Group Financial Statements Further Information 215
159
157 213 Key developments in 2011
159 215 Risk-oriented overall bank management
163 219 Default risk
178 234 Intensive care
182 238 Market risk
187 243 Liquidity risk
190 246 Operational risk
192 248 Other risks
195 251 Outlook
Risk-oriented overall bank
management
Risk management organisation
Commerzbank defines risk as the danger of possible losses or profits foregone due to
internal or external factors. In risk management we normally distinguish between
quantifiable risks – those to which a value can normally be attached in financial statements
or in regulatory capital requirements – and non-quantifiable types of risk such as
reputational and compliance risk.
The Bank’s Chief Risk Officer (CRO) is responsible for implementing the Group’s risk
policy guidelines for quantifiable risks laid down by the Board of Managing Directors. The
CRO regularly reports to the Board of Managing Directors and the Risk Committee of the
Supervisory Board on the overall risk situation within the Group.
Risk management activities are split between Credit Risk Management, Market Risk
Management, Intensive Care and Risk Controlling, and Capital Management, all of which
span across the group and report directly to the CRO. The heads of these four risk
management divisions together with the CRO make up the Risk Management Board within
Group Management. The Board of Managing Directors has delegated the operational
management of risk to committees. Under the relevant rules of procedure these are the
Group Credit Committee, the Group Market Risk Committee and the Group OpRisk
Committee, in addition to the Group Strategic Risk Committee which decides on risk issues
of an overarching nature. The CRO chairs all these committees and has the right of veto.
Commerzbank’s Asset Liability Committee has responsibility for the Group-wide
management of portfolio composition, capital allocation and development of RWAs, and is
the major instigator of the internal capital adequacy assessment process (ICAAP).
Risk strategy and risk management
The risk strategy, together with the business strategy, defines the strategic guidelines for the
development of Commerzbank’s investment portfolio. Risk-taking capability and liquidity are
ensured by setting concrete limits for the risk resources available to the Group in the form of
capital and liquidity reserves.
Banks’ core functions as transformer of liquidity and risk might result in inevitable threats
that can in an extreme case endanger the business continuity of the institution. For
Commerzbank, these implied existential threats are e.g. the default of Germany, Poland, one
Group Risk Report