ING Direct 2015 Annual Report Download - page 155

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 chart below provides, in EUR billions, high level information on the risks arising from the Bank’s business activities.
1 EC market risk: Mainly held for the price risk embedded in equity investments;
2 EC market risk: Mainly held for the interest rate risk embedded in the long-term investment of ING’s capital (investment of own funds). In this overview the
replication of capital is presented in line with the regulatory prudential approach and therefore capital itself is classified as an overnight interest rate position.
Risk cycle process
ING uses a step by step risk management approach to monitor, mitigate and manage its financial and non-financial risks. The
approach consists of a cycle of five recurrent activities: risk identification, risk assessment, risk control, risk monitoring and risk
reporting. In short, this implies: determine what the risks are, assess which of those risks can really do harm, take mitigating measures
to control these risks, monitor the development of the risk and if measures taken are effective and report the findings to management
at all relevant levels to enable them to take action when needed.
The recurrence is twofold. One: identification, assessment and review, and update of mitigating measures are done periodically. Two:
the periodical monitoring exercise may indicate that new risks are arising, known risks are changing, assessed risk levels are changing,
or control measures are not effective enough. Further analyses of these findings may result in renewed and more frequent risk
identification, and/or assessment, and/or change of mitigating measures.
ING Bank Annual Report 2015 153