Risk Management - Public Bank | PBeBank.com

publicbank • 41
RISK MANAGEMENT PROCESS
Public Bank has established, within its risk management
framework, a structured approach to enterprise-wide risk
management which balances risk and return, and
integrating risk management processes for market risk,
credit risk, operational risk and liquidity risk for more
effective risk management. The risk management process
is categorised into the following 4 broad processes:
Risk Identification
During the risk identification process, the risk management
personnel working together with the business risk units
will collate data using different tools and sources of data
or information to identify types and sources of risk,
understand the complexities of each risk and analyse the
risk issues with reference to the risk management policies
and limits, and industry best practices.
Risk Assessment and Measurement
These internal processes involve the participation of
business risk units and the independent risk management
and control functions in quantifying and assessing the risk
exposure such as developing scenario analysis for
identifying the impact of potential risk, and establishing
benchmarks and indicators to ascertain the level or size of
the risk.
Risk Control and Mitigation
The independent risk management and control functions
assist the risk management committees to identify risks
and recommend measures to control and mitigate risks.
Such measures vary according to the type of risks and
methods available. The Risk Management Committee
would determine and approve the most appropriate risk
strategies and policies and limits. Enterprise-wide efforts
to manage risk are co-ordinated by the central risk
management functions with the efforts of the individual
business risk units to implement specific risk management
changes within their respective units.
Risk Monitoring
The independent risk management and control functions
monitor and ensure compliance with the risk management
policies and limits. Through extensive monitoring, the
effectiveness of the risk management process and the
areas of risk management weakness can be assessed and
identified, and on-going risk management effort is required
to create a more robust control environment.