ING Direct 2015 Annual Report Download - page 148

Contents
Who we are
Report of the
Management
Board
Corporate
Governance
Consolidated
annual accounts
Parent company
annual accounts
Other
information
Additional
information
Notes to the Consolidated annual accounts of ING Bank - continued
Risk management
ING Bank risk management
Introduction
ING Bank operates through a comprehensive risk management framework to ensure the risks are identified, well understood,
accurately measured, controlled and pro-actively managed at all levels of the organisation so that ING Bank’s financial strength is
safeguarded.
The risk management section describes the key risks that arise from ING Bank’s business model. It explains how the risk management
function is embedded within the organisation based on the ‘three lines of defence’. This includes front office as ‘first line of defence’,
independent risk management as the ‘second line of defence’ and the internal audit function as the ‘third line’. The key risks resulting
from the bank’s business model are managed by dedicated and specific risk management departments that each covers its own area
of expertise. ING Bank’s risk management disclosures provide qualitative and quantitative disclosures about credit, market, liquidity
and funding, business and non-financial risks.
The risk management section is in line with the accounting standards relating to the nature and the extent of the risks as required by
IFRS7 ‘Financial Instruments: Disclosures’ as adopted by the European Union and covered by the opinion of the External Auditors as
being part of the notes to the consolidated financial statements. Pillar III information is from a regulatory perspective largely based on
internal modelled risk metrics under the Basel rules and not addressed for verification to the External Auditors.
Navigation map
The index below enables the readers to track the main risk items through the various risk disclosures.
Subjects
Risk Management
Pillar III
These sections show ING’s approach to risk
management
.
Introduction to risk section
146
Introduction to Pillar III
240
Purpose and business model
147
Risk governance
147
Risk profile
151
Risk appetite framework and stress testing
154
Economic capital
158
Regulatory environment
159
Risk developments in 2015
161
Subjects
Risk Management
Pillar III
Credit risk is the risk of potential loss due to default by
ING Bank’s debtors (including bond
issuers) or trading
counterparties
.
Governance and credit risk definitions
162
Credit risk appetite and concentration risk framework
163
RWA comparison
246
Credit risk capital and measurement (SA & AIRB)
166
248
Securitisations
172
273
Credit risk tools
173
Credit risk portfolio
173
Credit quality
176
264
Credit risk mitigation
182
270
Risk management
Credit risk
ING Bank Annual Report 2015 146