ING Direct 2011 Annual Report Download - page 249

Risk management continued
ING Bank
subject to a variety of EU, US and other sanctions regimes. Cuba, Iran, Sudan, and Syria are identified by the US as state sponsors
ofterrorism and are subject to US economic sanctions and export controls.
Regulatory measures and law enforcement agencies investigations
ING Bank N.V. has continued discussions with its Dutch bank regulator De Nederlandsche Bank (DNB) related to transactions involving
persons in countries subject to sanctions by the EU, the US and other authorities and its earlier review of transactions involving sanctioned
parties. ING Bank completed the global implementation of enhanced compliance and risk management procedures, and continues
working to further strengthen the Financial Economic Crime controls as agreed with DNB.
ING Bank remains in discussions with authorities in the US concerning these matters, including ING Bank’s compliance with Office of
Foreign Asset Control requirements. ING Bank has received requests for information from US Government agencies including the US
Department of Justice and the New York County District Attorney’s Office. ING Bank is cooperating fully with the ongoing investigations
and is engaged in discussions to resolve these matters with the US authorities; however, it is not yet possible to reliably estimate the timing
or amount of any potential settlement, which could be significant.
Main developments in 2011
• Regulator relationships – Bank Compliance Risk Management continued to invest in pro-active relationships with regulators in the
jurisdictions where ING Bank operates, striving for an open approach and cooperation in identifying and mitigating compliance risks
for ING Bank.
• Promoting Integrity Programme – Bank Compliance Risk Management, together with Human Resources and Corporate
Communications & Affairs, continued with the roll-out of the Promoting Integrity Programme (PIP), a global employee education
programme focusing on ING Bank’s values (including the ING Bank Business Principles) and the role they play in the business and
workplace. Short e-modules were developed on Customer Trust and Anti-Fraud and were followed by manager-led dialogue sessions,
where employees discussed what integrity means for them and how the Business Principles and ING Bank Policies and standards can
be applied in their daily work.
• Ongoing enhancement of Financial Economic Crime controls – ING Bank continued its strong commitment to preventing any
involvement in criminal activity. Existing activities were further strengthened by increased monitoring and internal audits as well as
awareness and training programmes and an internal annual sign-off process for senior management concerning implementation of
policies and procedures relating to Financial Economic Crime including business with sanctioned parties.
• Gifts, Entertainment and Anti-Bribery Policy – ING Bank issued a revised Gifts, Entertainment and Anti-Bribery Policy to align with
the changing regulatory landscape in respect of anti-bribery which provides for severe penalties in case of bribery offences and with
new extra-territorial anti-bribery legislation, such as the UK Bribery Act.
• Learning – Continuous global education and awareness training was provided through face-to-face training sessions and learning tools
on topics such as Ultra High Risk Countries & Export Trade, Financial Economic Crime, and Gifts, Entertainment and Anti-Bribery.
Compliance Risk Management also continued its mandatory global Compliance Officer Training programme for all compliance officers
new to ING Bank.
ING BANK BUSINESS RISK
Business Risk for ING Bank has been defined as the exposure to value loss due to fluctuations in volumes, margins and costs, as well as
client behaviour risk. It is the risk inherent to strategy decisions and internal efficiency. The calculation of Business Risk Capital is done
by calculation of two components,
(i) Expense risk relates to the (in)flexibility to adjust expenses, when that is needed.
(ii) Client behaviour risk relates to clients behaving differently than expected and the effect that this behaviour can have on customer
deposits and mortgage pre-payments. The client behaviour risk is calculated by stressing the underlying assumptions in the models
for behavioural assets and liabilities.
Each of these components is calculated separately, and combined to one business risk figure via the variance-covariance methodology.
1 Who we are 2 Report of the Executive Board 3 Corporate governance 4 Consolidated annual accounts 5 Parent company annual accounts 6 Other information 7 Additional information
247ING Group Annual Report 2011