ING Direct 2015 Annual Report Download - page 154

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
Financial risks:
• Credit risk: the risk of potential loss due to default and/or credit rating deterioration by ING Bank’s debtors (including bond issuers)
or trading counterparties;
• Market risk: the risk of potential loss due to adverse movements in market variables. Market risks include interest rate, credit
spread, equity, real estate and foreign exchange risks;
• Funding and liquidity risk: the risk that ING Bank or one of its subsidiaries cannot meet its financial liabilities when they come due,
at reasonable cost and in a timely manner. Liquidity risk can materialise both through trading and non-trading positions; and
• Business risk: the exposure to value loss due to fluctuations in volumes, margins and expenses, as well as customer behaviour risk.
These fluctuations can occur because of internal, industry, or wider market factors. It is the risk inherent to strategy decisions and
internal efficiency, and as such strategic risk is included in business risk.
Non-financial risks:
• Operational risk: the risk of direct or indirect loss resulting from inadequate or failed internal processes, people and systems or
from external events. It includes reputational risk, as well as legal risk; and
• Compliance risk: 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 as part of the Orange Code.
ING Bank Annual Report 2015 152