Dresdner Bank - Commerzbank International SA

Dresdner Bank Luxembourg S.A. Annual Report 2008
62
D. Risk Management
Risks are a significant component of banking business. The bank’s success crucially depends on systematically
identifying, quantifying and effectively managing the bank-specific credit, market and liquidity
risks (so-called primary risks) consciously entered into within the context of the business activity. Furthermore,
efficient and integrated risk management and risk controlling require the integration of all entrepreneurial
risks, which are also not bank-specific. These include the risk associated with short-term and
long-term business planning and business structure – business risk and strategic risk – as well as the
operational and reputational risks (so-called secondary risks) frequently also occurring interactively with
the primary risks.
The bank generally pursues a conservative and very selective risk strategy with regard to entering into
risks. In doing so, the risk strategy defined by the Management Board and Supervisory Board of Dresdner
Bank AG forms the framework for the local risk strategy of the bank.
With the aim of the clear separation of functions, the bank’s market segments report to one board
member, while a further board member is responsible for risk monitoring and controlling functions. Risk
management is an integral part of the bank’s management and controlling processes. Risks are taken
with consideration to returns and potential losses while risk-bearing capabilities as well as clear responsibilities
are also taken into account. The risk management process includes the identification, analysis,
measurement, monitoring, communication and management of risk. The bank’s management and
relevant Dresdner Bank Group functions are kept regularly informed of the risk situation through various
reports.
Supervisory Board
(Audit Committee)
Delegation
Management Board
Information
Monitoring / Control
� Risk Management � Compliance
� Finance/Controlling � Legal
� External auditors � Audit
� Approval of rules of procedure
� Approvals of transactions via Management Board competence
� Approval of participating interests
� Approval of limits
� Confirmation of risk profile
� Responsibility for business policy
� Responsibility for credit policy
� Responsibility for equity capital investment/liquidity management
� Defining limits
� Defining risk suitability / risk profile
Risk Management
� Divisions: decentralised within the context of their duties
� Liquidity Management: centralised interest / liquidity / FX
� ALCO: Advising Management Board, asset/liability management,
equity capital investment, strategic risk management
Supervisory
Board
Rules of
procedure
Management
Board
Rules of
procedure