2012 Registration document and annual financial report - BNP Paribas

5RISKSAND CAPITAL ADEQUACYAnnual risk survey➤ TABLE 1: RISK-WEIGHTED ASSETS (*) BY RISK TYPE AND BUSINESS5In millions of eurosDomesticMarketsPersonalFinanceRetail BankingInternationalretail bankingCorporate &Investment BankingAdvisoryandcapitalmarketsCorporatebankingInvestmentSolutions31 December 2012OtheractivitiesCredit risk 196,279 43,647 72,492 8,631 75,855 11,084 3,163 411,151Securitisation 1,113 57 212 12,141 126 1,047 4,380 19,076Counterparty risk 3,878 13 468 15,750 54 346 24 20,533Equity risk 2,306 205 163 469 1,698 2,032 17,504 24,377Market risk 208 97 298 21,633 1,696 461 1,155 25,548Operational risk 13,105 4,829 5,814 16,414 3,692 6,015 1,285 51,154TOTAL 216,889 48,848 79,447 75,038 83,121 20,985 27,511 551,839(*) Information on risks categories is provided in chapter 5.3.TotalSeesection 5.4Seesection 5.5Seesection 5.6Seesection 5.7Seesection 5.7Seesection 5.10Seesection 5.2Most of the Group’s exposures give rise to credit risk. Following the introduction of CRD 3 , market risk in the trading book is limited to 5% of the Group’srisk-weighted assets.In addition, the split of risk-weighted assets by division reflects the Group’s diversified business mix, with 63% devoted to R etail B anking (including 39%for the D omestic M arkets) and 29% for C orporate and I nvestment banking.TOP RISKS OF THE YEARCurrent top risks of the Group, as notably assessed and monitoredthrough the Group’s Risk Profile Statement and related guidelines/thresholds during 2012, are detailed below. A more detailed review isprovided in the sections 5.4 to 5.12.LIQUIDITY RISKIn 2011, the sovereign debt crisis in the euro zone and the generaleconomic environment put pressure on liquidity and the cost offinancing for European banks. In this climate, the Group implementedan adjustment plan aimed at reducing its financing needs, particularlyin dollars.In 2012, access to liquidity improved significantly, particularly for theEuropean banks which benefited from measures taken by the ECB to savethe euro and the European banking system.The Group's liquidity position was improved considerably as a result ofcompleting the adjustment plan in the business lines in September, alarge amount of wholesale funding raised in the markets and an increasein assets available for central bank refinancing. During the year, theGroup's central bank deposits rose sharply as a result of the adjustmentplan. Surplus liquidity was allocated to central bank deposits pendingclarification of the treatment of various asset types for future regulatoryliquidity ratios.The increase in the Group's medium and long-term wholesale fundingwas combined with greater diversification of financing sources viarecourse to other distribution networks, structures and currencies andby managing the balance between secured and unsecured financing.2202012 Registration document and annual financial report - BNP PARIBAS