Barclays 2015 Annual Report Download - page 138

136 I Barclays PLC Annual Report 2015 home.barclays/annualreport
Risk review
Risk management
Funding and capital risk management
Overview
Organisation and structure
Capital management is integral to the Group’s approach to financial
stability and sustainability management and is therefore embedded in the
way businesses and legal entities operate. Capital demand and supply is
actively managed on a centralised basis, at a business level, at a local
entity level and on a regional basis taking into account the regulatory,
economic and commercial environment in which Barclays operates.
Roles and responsibilities
The Group’s capital management strategy is driven by the strategic aims of
the Group and the Risk Appetite set by the Board. The Group’s objectives
are achieved through well embedded capital management practices.
Capital planning
Capital forecasts are managed on a top-down and bottom-up basis
through both short term (one year) and medium term (three to five
years) financial planning cycles. Barclays’ capital plans are developed
with the objective of maintaining capital that is adequate in quantity and
quality to support the Group’s risk profile, regulatory and business needs.
As a result, the Group holds a diversified capital base that provides
strong loss absorbing capacity and optimised returns.
Barclays’ capital forecasts are continually monitored against relevant
internal target capital ratios to ensure they remain appropriate, and
consider risks to the plan including possible future regulatory changes.
Local management ensures compliance with an entity’s minimum
regulatory capital requirements by reporting to local Asset and
Liability Committees with oversight by the Group’s Treasury Committee,
as required.
Funding risk
The ability of the Group to achieve its
business plans may be adversely impacted
if it does not effectively manage its capital
(including leverage) and liquidity ratios.
Group Treasury manage funding risk on a
day-to-day basis with the Group Treasury
Committee acting as the key governance
forum.
Capital risk
Capital risk is the risk that the Group has
insufficient capital resources to:
 meet minimum regulatory requirements in the UK and in other
jurisdictions such as the US and South Africa where regulated
activities are undertaken. The Group’s authority to operate as a
bank is dependent upon the maintenance of adequate capital
resources at each level where prudential capital requirements are
applied
 support its credit rating. A weaker credit rating would increase the
Group’s cost of funds
 support its growth and strategic options.
Board Risk Committee
Organisation and structure
Group Treasury Committee
Chaired by the Group Treasurer
Manages the Group’s liquidity and risk through:
■ Setting of policy and controls
■ Monitoring compliance with regulatory and internal targets
■ Measuring performance and market risk of liquidity buffer and of other
non-traded market risks managed by Treasury
■ Overseeing Group capital and funding plans