ING Direct 2015 Annual Report Download - page 151

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
•The SB is responsible for supervising the policy of the MBB, the general course of affairs of ING Bank and its business (including its
financial policies and corporate structure). For risk management purposes the SB is assisted by two sub-committees:
•The Audit Committee, which assists the SB in monitoring the integrity of the financial statements of ING Bank, in monitoring
the compliance with legal and regulatory requirements, and in monitoring the independence and performance of ING's
internal and external auditors; and
•The Risk Committee, which assists the SB on matters related to risk governance, risk policies and risk appetite setting.
•The MBB is responsible for managing risks associated with all activities of ING Bank. The MBB’s responsibilities include ensuring that
internal risk management and control systems are effective and that ING Bank complies with relevant legislation and regulations.
On a regular basis, the MBB reports on these issues and discusses the internal risk management and control systems with the SB.
On a quarterly basis, the MBB reports on the Bank’s risk profile versus its risk appetite to the Risk Committee, explaining changes in
the risk profile.
The CRO ensures that the boards are well informed and understand ING Bank’s risk position at all times. Every quarter, the CRO reports
to the board committees on ING Bank’s risk appetite levels and on ING Bank’s risk profile. In addition, the CRO briefs the board
committees on developments in internal and external risk related issues and ensures the board committees understand specific risk
concepts.
As part of the integration of risk management into the annual strategic planning process, the MBB issues a Planning Letter which
provides the corporate strategic direction, and addresses key risk issues. Based on the Planning Letter, the business lines and business
units develop their business plans which align with the Bank’s strategic direction. The process includes a qualitative and quantitative
assessment of the risks involved. As part of the process, strategic limits and risk appetite levels are explicitly discussed. Based on the
business plans, the MBB formulates the Strategic Plan which is submitted to the SB for approval.
Executive level
The ING Bank Finance and Risk Committee (BF&RC) is a platform for the CRO and the Chief Financial Officer (CFO), along with their
respective direct reports, to coordinate issues that relate to both the finance and risk domains. On reporting level, BF&RC has the
responsibility to co-ordinate, on a high level, the finance and risk decisions that have an impact on internal and/or external reporting.
The risk committees described below act within the overall risk policy and delegated authorities granted by the Management Board
Bank:
•ING Bank Credit Committee – Policy (GCC(P)): Discusses and approves policies, methodologies and procedures related to credit,
country and reputation (ESR) risks for ING Bank. The GCC(P) meets on a monthly basis;
•ING Bank Credit Committee – Transaction Approval (GCC(TA)): Discusses and approves transactions which entail taking credit risk
(including issuer investment risk). The GCC(TA) meets twice a week;
•Asset and Liability Committee ING Bank (ALCO Bank): Discusses and approves on a monthly basis the overall risk profile of all ING
Bank’s market risks that occur in its activities. ALCO Bank defines the policy regarding funding, liquidity, interest rate mismatch
and solvency for ING Bank; and
•Non-Financial Risk Committee Bank (NFRC Bank): Accountable for the design and maintenance of the Non-Financial Risk
Management Framework including Operational Risk Management, Compliance and Legal policies, minimum standards, procedures
and guidelines; the NFRC structure; development of tools, methods and key parameters (incl. major changes) for risk identification,
measurement and monitoring/ reporting. The minimum frequency of the NFRC Bank is at least quarterly.
Regional and business unit level
ING Bank’s regional and business unit management have primary responsibility for the management of risks (credit, market, funding
and liquidity, operational, legal and compliance risks) that arise in their daily operations. They are accountable, together with their
employees, for the implementation and operation of appropriate risk frameworks affecting their businesses to ensure compliance with
procedures and processes set by ING Bank. The local (regional and BU) risk manager is responsible for the analysis, control and
management of risks across the whole value chain (from front to back office), based on which a robust control structure is maintained.
Risk management function
Based on the three lines of defence, an independent risk management function is embedded in all levels of ING Bank’s organisation.
The CRO, a MBB member, bears primary overall responsibility for the risk management function. The CRO is responsible for the
management and control of risk on a consolidated level to ensure that ING Bank’s risk profile is consistent with its financial resources
and the risk appetite. The CRO is also responsible for establishing and maintaining a robust organisational basis for the management
of risk throughout the organisation.
ING Bank Annual Report 2015 149