ING Direct 2013 Annual Report Download - page 275

Risk management continued ING Bank
ING Bank as Sponsor
In the normal course of business, ING Bank structures financing transactions for its clients by assisting them in obtaining sources of
liquidity by selling the clients’ receivables or other financial assets to an SPV. The transactions are often funded by the ING Bank
administered multi seller Asset Backed Commercial Paper (ABCP) conduit Mont Blanc Capital Corp. (rated A-1/P-1). Mont Blanc Capital
Corp. continues to fund itself externally in the ABCP markets. In its role as administrative agent, ING Bank facilitates these transactions by
providing structuring, accounting, funding and operations services. ING Bank also provides support facilities (liquidity and program wide
enhancement) backing the transactions funded by the conduit. Mont Blanc is fully consolidated into the ING Bank financial accounts.
Credit risk tools
Credit risk policies
ING credit risk policies provide for generic rules and roles and responsibilities that should always prevail within ING Bank. While allowance
is given for discretionary variation to comply with local regulations, such variations must always comply with the content of a global ING
Bank wide credit risk policy and approved by (local) credit risk. All credit risk policies are created according to the policy development
standards and reviewed on a regular basis. Each policy has a credit risk sponsor and is created in close consultation with the various
stakeholders within credit risk, front office and where applicable other corporate departments. All policies require approval by the Credit
Risk Committee (CRC) and where applicable (for instance in case of determining delegated authorities) by the Global Credit Committee (GCC).
Credit risk systems and data standards
The acceptance, maintenance, measurement, management and reporting of credit risks at all levels of ING Bank is accomplished through
promotion of single, common credit risk data standards and the integration into common credit risk tools that support standardised and
transparent credit risk practices. ING has chosen to develop the credit risk tools centrally. Corporate Credit Risk Management (CCRM)
together with the Bank wide Customer Domain (BCD) jointly designs and operates the tools, the process and the environment while the
ING units (the users) provide the data input and various other ING departments and/or external regulators provide the rules, policies, and
methodology embedded in the various tools.
The philosophy is to re-use the same data for all purposes, in an integrated approach that overlaps the three key areas of ING Bank policy,
the regulatory environment in which we operate, and the daily processes which are active throughout the group. Overlapping these three
areas is the essential requirement to ensure data quality standards and discipline remains high. The integrated approach is illustrated in the
following diagram.
Loan Loss Provisioning
Policy Regulatory
Process
Data Quality
Basel II / Basel III
IFRS
Sarbanes-Oxley
Straight-through Processing
Workflow Management
One Time Data Entry
Ownership / Authorisation
Risk Weighted Assets CDD/MiFID
Expected Loss
Country Risk
Definitions / Standards
INCAP/RECAP
Standardised Processes
Risk / Reward
The CCRM/BCD customer-centric data model conforms strongly to the three core business needs of ING Bank:
• To transact efficiently with our counterparties;
• To be compliant with our internal and external obligations; and
• To monitor the risks we undertake.
The customer-centric approach ensures that ING Bank can react quickly to changing regulations, business needs and best practices in our
dealings with our clients and prospects.
Guiding principles regarding data elements
The guiding principles are that each data element should only be input once, and should have a clear ‘home’ system or database which is
leading throughout all uses of that data element. From the data ‘home’, the data may then be redistributed to other systems or databases
that may require that data in an automated straight through processing (STP) method. Depending on the need, the data may be
transferred in real time, near real time, daily, weekly or monthly. This frequency of underlying data transfer is independent from the data
transfer that may take place for consolidation purposes.
The main credit risk systems are all accessed through a portal (Vantage), which also provides global tools for the customer domain (GRID),
compliance, and regulatory reporting.
273ING Group Annual Report 2013
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