MoneyGram 2013 Annual Report Download - page 54

Table of Contents
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Enterprise Risk Management
Risk is an inherent part of any business. Our most prominent risk exposures are credit, interest rate, foreign currency exchange and operational
risk. See Part 1, Item 1A “ Risk Factors ”
for a description of the principal risks to our business. Appropriately managing risk is important to the
success of our business, and the extent to which we effectively manage each of the various types of risk is critical to our financial condition and
profitability. Our risk management objective is to monitor and control risk exposures to produce steady earnings growth and long-
term economic
value.
Management implements policies approved by our Board of Directors that cover our investment, capital, credit and foreign currency practices
and strategies. The Board receives periodic reports regarding each of these areas and approves significant changes to policy and strategy. An
Asset/Liability Committee, composed of senior management, routinely reviews investment and risk management strategies and results. A Credit
Committee, composed of senior management, routinely reviews credit exposure to our agents.
52
•
our offering of money transfer services through agents in regions that are politically volatile or, in a limited number of cases, that are
subject to certain OFAC restrictions;
•
changes in tax laws or an unfavorable outcome with respect to tax positions, or a failure by us to establish adequate reserves for tax events;
•
our substantial debt service obligations, significant debt covenant requirements and credit rating and our ability to maintain sufficient
capital;
•
sustained financial market illiquidity, or illiquidity at our clearing, cash management and custodial financial institutions;
•
our significant exposure to loss in the event of a major bank failure or a loss of liquidity in the bank deposit market;
•
the ability of MoneyGram and its agents to maintain adequate banking relationships;
•
the financial health of certain European countries, and the impact that those countries may have on the sustainability of the euro;
•
a security or privacy breach in systems on which we rely;
•
disruptions to our computer systems and data centers and our ability to effectively operate and adapt our technology;
•
continued weakness in economic conditions, in both the U.S. and global markets;
•
weakened consumer confidence in our business or money transfers generally;
•
a significant change, material slow down or complete disruption of international migration patterns;
•
our ability to manage credit risks from our retail agents and official check financial institution customers;
•
our ability to retain partners to operate our official check and money order businesses;
•
our ability to successfully develop and timely introduce new and enhanced products and services and our investments in new products,
services or infrastructure changes;
•
our ability to manage risks associated with our international sales and operations;
•
our ability to adequately protect our brand and intellectual property rights and to avoid infringing on the rights of others;
•
our ability to attract and retain key employees;
• our ability to manage risks related to the operation of retail locations and the acquisition or start-
up of businesses;
•
our ability to implement the global reorganization and restructuring program as planned, whether the expected amount of costs associated
with such program will exceed our forecasts and whether we will be able to realize the full amount of estimated savings from such program;
•
our ability to maintain effective internal controls;
•
our capital structure and the special voting rights provided to designees of THL on our Board of Directors; and
• the risks and uncertainties described in the “ Risk Factors ” and “ Management’
s Discussion and Analysis of Financial Condition and
Results of Operations
” sections of this Annual Report on Form 10-
K, as well as any additional risk factors that may be described in our
other filings with the SEC from time to time.