Risk Management
Rabobank Group manages risks at various levels. At the highest level, the Executive Board determines the risk strategy it will pursue, the policy framework as well as the limits, under the supervision of the Supervisory Board. The Supervisory Board regularly assesses the risks attached to the activities and portfolio of the Rabobank Group.
The Chief Financial Officer, who is a member of the Executive Board, is responsible for the implementation of the risk management policy within the Rabobank Group. Risk management within Rabobank is fully integrated in the daily activities. Both on group level and locally risk management functions are established.
At Rabobank Group level, the Executive Board has established the following committees:
- the Balance Sheet and Risk Management Committee Rabobank Group, responsible for advising the Executive Board on all risk types, except individual credit risks.
- the Central Credit Committee Rabobank Group and the Policy Credit Committee Rabobank Group. These two committees deal with credit risk related issues, except for credit risk policy on portfolio level.
The Executive Board itself decides on the largest financing applications supported by advise from Credit Committees.
The responsibility for the implementation of the risk policies within Rabobank Group is spread across two departments: Group Risk Management and Credit Risk Management.
Group Risk Management is in charge of the policies for interest, market, liquidity, currency and operational risks as well as for the policy for credit risks at portfolio level.
Policy credit committees, consisting of the Policy Credit Committee (Policy CC) Rabobank Group and the Policy Credit Committees Wholesale and Retail, decide on, or recommend to the Executive Board, credit policy proposals. The credit committees play a key role in ensuring a consistency of standards of credit analysis and the rating models and ensuring compliance with Rabobank credit policy. Policy Credit Committee Rabobank Group is responsible for credit risk policy and credit management of all Group units involved in credit. The Group policy as established by the Policy CC Rabobank Group constitutes
the framework for all Group entities. Within this framework entities may define and operate their own credit policy for individual counterparties. The Policy CC Retail operates in a similar way for domestic retail banking and the Policy CC Wholesale for wholesale banking and international retail banking.
In the Policy CC Rabobank Group which is chaired by the CFO, the Executive Board is represented by three members. The CFO is also chairman of both Policy CC Wholesale and Policy CC Retail. Policy Committees are composed of representatives from the highest management levels of Rabobank. Rabobank has a separate department for financial market products within Rabobank International, Global Financial Markets (GFM). Its aim is to create customer value and to be the preferred supplier of financial markets products to the Rabobank Group and its core customers, including customers specific
to GFM. Within GFM a credit risk function is established that closely monitors exposures.
Credit Risk Management is responsible for the credit risk acceptance policy at individual level. Furthermore, risk management is practised within the business units as well, where independent risk control departments manage the risks relevant for those units, based on the group wide regulation on policies, measurement, limits and monitoring.
The main departments within Credit Risk Management are the approval department and the special asset management department.
Approval of larger financing applications is decided on by various committees, the level of the applicable committee depending on the amount of the requested financing. The Executive Board itself decides on the largest financing applications supported by advise from Credit Committees.
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