Annual Report of Euram Bank 2019


Risk-bearing capacity

On the basis of the overall risk profile, care is being taken that the essential risks are covered by the

risk covering potential on a current basis, taking into account risk concentrations, and accordingly

the risk-bearing capacity of the bank is ensured. Euram Bank has established an internal process to

ensure its risk-bearing capacity. The risk-bearing capacity is considered during determination of the

strategies as well as their modification. Adequate risk control and controlling processes have been

established to implement the strategies and/or to ensure the organisation’s risk-bearing capacity.

For risks that are incorporated in the concept of risk-bearing capacity but for which no suitable

quantification procedure is available, a risk amount (risk buffer) is determined on the basis of a

plausibility check. The plausibility check is carried out on the basis of a qualified expert estimate.

The choice of the methods and procedures for assessing risk-bearing capacity is the responsibility of

the Managing Board. The determination of essential elements of risk-bearing capacity control as well

as of essential underlying assumptions is approved by the Managing Board. The adequacy of the

methods and procedures is checked by the respective competent employees every year.

The procedures used to control risk-bearing capacity take account of the aim to manage the bank on

a going-concern basis, but also the protection of creditors against economic loss. Euram Bank

disposes of a process for the planning of future capital requirements. The planning horizon comprises

an adequately long period of several years (three years). In this context, account is taken of the effects

that changes of the bank’s own business activity or of the strategic targets as well as changes to the

economic environment will have on the capital requirement – beyond the risk assessment horizon of

the risk-bearing capacity concept.

Internal Control System

The Internal Control System (ICS) of Euram Bank is the totality of all process-related monitoring

measures, the elements of which are integrated in many different ways in the organisational and

technical workflows. It includes the respective organisational guidelines of the entire operational

management, as well as the defined control mechanisms and monitoring functions of the persons

directly responsible for the processes. It is ordered and/or set up by the management in accordance

with actual requirements, as well as reviewed in terms of reliability and efficacy, and modified if

necessary, by the Risk Management function. Overall responsibility for the ICS is in the hands of the

Managing Board, with the head of Risk Management being implemented as professional ICS Officer.


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