Dresdner Bank - Commerzbank International SA

a year, in the context of the resubmission required by the internal rules of procedure, they are reassessed
and submitted to the key member of staff. Both risk analysis and risk monitoring are based on the dual
control principle.
The main part of the credit disbursements is covered by adequate collateral securities. Lending approaches
and regulations pertaining to the valuation of collateral securities are specified in the internal lending
guidelines and operational procedures. Both the credit risk that is to be collateralised and the intrinsic value
of the collateral are subject to ongoing monitoring.
As a focused private banking unit (PWM), the bank’s lending business is essentially based on the private
credit portfolio. The emphasis is on Lombard loans which are generally collateralised via respective securities
portfolios managed by the bank. Further important credit products include guarantees, cash credits,
trustee loans and real estate financing.
In addition to the private lending business, the bank very selectively takes part in transactions of the
Luxembourg branch which forms part of the Dresdner Kleinwort business segment. The Bank’s analysis
and monitoring of these counterparty risks is essentially based on the respective primary analysis of the
business segment.
The bank’s monitoring of trading risks is based on an information system used within the Dresdner Bank
Group. Day-to-day monitoring comprises the assessment of current limit levels and an ongoing evaluation
all trading activities and provisions of collateral.
Operational risks
Within the Dresdner Bank Group operational risk has been defined as the risk of a direct or indirect loss
through inadequacies or failures in projects, processes or controls caused by technical, personnel, organisational
or external factors.
Operational risks are managed independently by the bank’s individual divisions. Specific measures have
been implemented to sensitise staff and executives to the detection of potential operational risks. Contingency
plans, regulations and operational procedures reduce the operational risk. Implemented Business
Continuity Management (BCM) ensures functionality of the bank’s core processes in the event of an
emergency.
A significant component of the measurement and control of operational risks is the annual scenario
analysis, which forms the basis of the risk capital calculation. The emphasis is on the quantification of particularly
serious potential losses. The bank’s management is regularly informed of any event of damage
or loss, risk indicators and the general development of the bank’s operational risks.
Notes to the Annual Accounts
65
Balance Sheet as at 31 December 2008