ING Direct 2015 Annual Report Download - page 149

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
Subjects
Risk Management
Pillar III
Market risk is the risk of potential loss due to adverse
movements
in market variables.
Governance
191
RWA comparison
278
Economic capital
191
Market risk in banking books
192
Market risk in trading books
199
Capital at Risk
278
Subjects
Risk Management
Pillar III
Funding and liquidity risk is the risk that ING Bank or
one of its subsidiaries cannot meet
the financial
liabilities when they come due, at reasonable cost and
in a timely manner
.
Governance
204
Management framework
205
Funding and Liquidity profile
208
Liquidity buffer
280
Asset encumbrance
280
Regulatory developments
208
Subjects
Risk Management
Pillar III
Operational risk is the risk of direct or indirect loss
returning from inadequate or failed
internal processes,
people and systems or from external events
.
Compliance risk is the risk of impairment of ING Bank’s
integrity as a result of failure
(or perceived failure) to
comply with
applicable laws, regulations, ING Bank
policies and
minimum standards and the ING Values.
Governance
208
Framework
209
Operational risk and main developments
210
Compliance risk and main developments
211
Non-financial risk awareness
213
Subjects
Risk Management
Pillar III
Business risk is the exposure to value loss due to
fluctuations in volumes, margins and costs, as well as
customers' behaviour risk.
Analysis business risk
213
Governance
213
Purpose and business model
The purpose of ING Bank’s risk management function is to support the ambition of ING Bank to be the primary bank for our customers,
by empowering the business by an integrated state of the art enterprise wide risk management platform. The following principles
support this purpose:
•The risk management function is embedded in all levels of ING Bank’s organisation and is part of the daily business activities and
strategic planning to have a sustainable competitive advantage;
•Products and portfolios are structured, underwritten, priced, approved and managed properly and compliance with internal and
external rules monitored;
•Delegated authorities are consistent with the overall Bank strategy and risk appetite; and
•Transparent communication to internal and external stakeholders on risk management.
Risk governance
Governance model
ING Bank’s risk management framework is based on a ‘three lines of defence’ governance model, whereby each line has a specific role
and defined responsibilities in such a way that the execution of tasks is separated from the control of the same tasks. At the same
time they have to work closely together to identify, assess and mitigate risks. This governance framework ensures that risk is
managed in line with the risk appetite as approved by the Management Board Bank (MBB) and the Supervisory Board (SB), and is
cascaded throughout ING Bank.
Market risk
Funding and liquidity risk
Non-financial risk
Business risk
ING Bank Annual Report 2015 147