Annual Report of Euram Bank 2019

eurambank

A N N U A L R E P O R T 2 0 1 9

Organizational structure and process organization

The characteristics of the organizational structure and process organization ensure that

incompatible activities are carried out by different employees and that conflicts of interest are

avoided. Processes and the associated tasks, competencies, responsibilities, controls and

communication channels are clearly defined and geared to each other. This includes the regular

and ad-hoc review of IT authorizations, signatory powers and other authorities granted. The

same applies with respect to interfaces with key outsourcing partners.

Risk control and controlling process

Euram Bank has put in place adequate risk control and controlling processes that ensure the

identification, assessment, control as well as monitoring and communication of essential risks and

of the associated risk concentrations. These processes are integrated in a joint yield management

and risk control system (internal capital adequacy assessment process, ICAAP). Suitable measures

ensure that the risks and associated risk concentrations are effectively limited and monitored taking

account of the risk-bearing capacity and of the risk tolerances. The risk control and controlling

processes make sure that essential risks – even from outsourced activities and processes – can

be identified early on, measured in full and presented adequately. Reports on the risk situation

are presented to the Managing Board at suitable intervals. Risk reporting must be effected in a

comprehensible, meaningful way. Apart from the relevant presentation, it also includes an

assessment of the risk situation. If necessary, risk reporting will also include proposed action, e.g.

with a view to a reduction of risk. Moreover, risk concentrations and their potential consequences

are dealt with separately. As a complement to regular reporting, annual stress tests are carried out.

The results of the stress tests and the potential effects on the risk situation and the risk covering

potential, as well as the essential assumptions underlying the stress tests are presented in a

separate report. Information that is essential with a view to risk will be passed on to the Managing

Board, the respective officers and the Internal Audit function without delay, for suitable measures

or audits to be initiated at an early stage. The Managing Board informs the Supervisory Board in

writing about the risk situation at quarterly intervals. Information that is essential for the Supervisory

Board under a risk aspect will be passed on by the Managing Board without delay. The risk control

and controlling processes are promptly adjusted to changing conditions.

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