ING Direct 2015 Annual Report Download - page 152

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
In 2015, the risk management organisation was redesigned to effectively address the internal and external (market and regulatory)
developments and challenges that ING as a bank is facing. Over the past years, banks have been subject to increasing regulatory and
public pressure with regard to their risk management policies, processes and systems. New requirements and regulations have been
introduced and implemented. To be able to effectively address these developments and challenges, ING Bank changed the set-up of
its risk-management organisation. Risk managers can focus on primary risk management processes and strategic priorities, while a
separate ‘Risk services’ department enables and supports these tasks with information management, risk reporting and analytics. The
main changes compared to the previous organisation are:
• The trading risk and credit risk management departments have been combined into a new department named ‘Credit and Trading
Risk’. This set-up ensures that topics that link traditionally to both credit risk and market risk (such as counterparty credit risk) are
approached in an integral way and in line with the applicable regulations;
• A ‘Balance Sheet Risk’ department has been established that focuses on the management of different market risks that arise in
the Banking Books and Bank Treasury as well as liquidity & funding risk;
• A separate ‘Risk Services’ department has been created reporting directly to the CRO to service the core risk activities. Risk Services
aims to create value for internal and external stakeholders by continuously optimizing the efficiency, transparency and
effectiveness of the risk processes.
The organisation chart below illustrates the new reporting lines within ING Bank risk organisation:
The General Managers of these risk departments report to the CRO and bear direct responsibility for risk (mitigating) decisions at Bank
level. The General Managers and the CRO are responsible for the harmonisation and standardisation of risk management practices. In
addition, there are two staff departments in place:
• Model Validation (MV), a staff department that carries out periodic validations of all significant regulatory risk models used by ING
Bank. To ensure independence from the business and other risk departments, the department head reports directly to the CRO,
and
• Risk & Capital Integration: a staff department that reports functionally to the CRO and is responsible for overarching risk topics as
risk appetite, disclosures, recovery and resolution planning and stress testing as well as capital planning.
The risk function is at all levels independent from the commercial departments which allow its criteria and opinions to be heard and
taken into account. At the Bank level, it is represented by the CRO in the MBB, which ensures sufficient countervailing power in the
decision-making processes to prevent excessive risks.
Despite these changes in the governance structure, the set-up of the Risk management paragraph hasn’t changed since it is based on
risk types instead.
Risk policies, procedures and standards
ING Bank has a framework of risk management policies, procedures and standards in place to create consistency throughout the
organisation, and to define minimum requirements that are binding to all business units. The governance framework of the local
business units aligns with ING Bank’s framework and meets local (regulatory) requirements. Senior management is responsible to
ensure policies, procedures and standards are implemented and adhered to. Policies, procedures and standards are regularly reviewed
and updated via the relevant risk committees to reflect changes in markets, products and practices.
ING Bank Annual Report 2015 150