Wells Fargo 2013 Annual Report Download - page 91

Table 44: Distribution of Daily Trading-Related Revenues (for the year ended December 31, 2013)
Table 45: Daily Trading-Related Revenues
Market Risk Governance The Finance Committee of our Board
reviews and approves the acceptable level of market risk for the
Company. The Corporate Risk Group’s Market Risk Committee
is responsible for governance and oversight over market risk-
taking activities across the Company as well as the establishment
of risk tolerances and line of business VaR limits. The Corporate
Market Risk Group, which is part of the Corporate Risk Group,
administers and monitors compliance with the requirements
established by the Market Risk Committee. The Corporate
Market Risk Group has oversight responsibilities in identifying,
measuring and monitoring the Company’s market risk. The
group is responsible for quantitative market risk model
development, establishing independent risk limits, calculation
and analysis of market risk capital, and reporting aggregated and
line of business market risk information. Limits are regularly
reviewed to ensure they remain relevant and within the market
risk appetite for the Company. There is an automated limits
monitoring system that enables a daily comprehensive review of
multiple limits mandated across businesses by the Corporate
Market Risk Group. Limits are set with inner boundaries that
will be periodically breached to promote an ongoing dialogue of
risk exposure within the Company. Each line of business that
exposes the Company to market risk has direct responsibility for
managing market risk in accordance with defined risk tolerances
and approved market risk mandates and hedging strategies. As
described below, we measure and monitor market risk for both
management and regulatory capital purposes.
Market Risk Measurement Market Risk is the risk of adverse
changes in the fair value of the trading portfolios and financial
instruments held by the Company due to changes in market risk
factors such as interest rates, credit spreads, foreign exchange
rates, equity, and commodity prices. Market risk is intrinsic to
the Company’s sales and trading, market making, investing, and
risk management activities.
The Company uses VaR metrics complemented with
sensitivity analysis and stress testing in measuring and
monitoring market risk. These market risk measures are
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