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During the year 2008, the Value at Risk fluctuated between € 31 million (2007: € 20 million) and € 58 million(2007: € 32 million), with an average of € 39 million (2007: € 26 million). The increased turmoil in thefinancial markets and the large fluctuations, particularly in credit spreads and interest rates, caused the Valueat Risk to rise by more than 50 per cent. over 2008. As a result of the unwinding of certain market positions,the increase in Value at Risk was less than might otherwise have been expected given market developments.On the basis of the Value at Risk analysis, Rabobank Nederland determines its use of capital for market riskpositions throughout Rabobank Group in compliance with the regulations of the DNB.Value at Risk models have certain limitations; they are more reliable during normal market conditions, andhistorical data may fail to predict the future. Therefore, Value at Risk results cannot guarantee that actual riskwill follow the statistical estimate.Interest rate riskRabobank Group is exposed to structural interest rate risk in its balance sheet. Interest rate risk can resultfrom, among other things, mismatches in assets and liabilities; for example, mismatches between the periodsfor which interest rates are fixed on loans and funds entrusted. Rabobank Group manages interest rate riskthrough the BRMC-RG using both the accrual based Income at Risk concept and the value based Equity atRisk concept. Based on the Income at Risk and Equity at Risk analyses, the Executive Board forms an opinionwith regard to the acceptability of losses related to projected interest rate scenarios, and decides upon limitswith regard to Rabobank Nederland’s interest rate risk profile.Rabobank Group’s short-term interest rate risk is measured and controlled based on the concept of “Income atRisk”, which is the maximum amount of interest income-at-risk for the coming 24 months, due toincreases/decreases in interest rates of 200 basis points, assuming a stable balance sheet and no managementintervention. In this Income at Risk scenario a gradual increase/decrease of 200 basis points is assumed duringthe first year, while during the second year interest rates are assumed to remain stable.Rabobank Group’s long-term interest rate risk is measured and controlled based on the concept of “Equity atRisk”, which is the sensitivity of Rabobank Group’s market value of equity to an instant change in interestrates of 200 basis points.As at 31 December 2008, the Income at Risk (“IatR”) and Equity at Risk (“EatR”) for Rabobank Group wereas follows:200 basispoints increase200 basispoints decreaseIatR 1 – 12 months..................................................................................... + € 35 million - € 54 millionIatR 13 – 24 months................................................................................... - € 87 million + € 36 millionEatR ........................................................................................................... - 11% + 11%Rabobank Group performs complementary scenario analyses to access the impact of changes in customerbehaviour and the economic environment.288