JP Morgan Chase 2015 Annual Report Download - page 121

JPMorgan Chase & Co./2015 Annual Report 111
The Asset Liability Committee (“ALCO”), chaired by the Firm’s
Treasurer under the direction of the COO, monitors the
Firm’s balance sheet, liquidity risk and structural interest
rate risk. ALCO reviews the Firm’s overall structural interest
rate risk position, funding requirements and strategy, and
securitization programs (and any required liquidity support
by the Firm of such programs). ALCO is responsible for
reviewing and approving the Firm’s Funds Transfer Pricing
Policy (through which lines of business “transfer” interest
rate risk to Treasury) and the Firm’s Intercompany Funding
and Liquidity Policy. ALCO is also responsible for reviewing
the Firm’s Contingency Funding Plan.
The Capital Governance Committee, chaired by the Head of
the Regulatory Capital Management Office (under the
direction of the Firm’s CFO) is responsible for reviewing the
Firm’s Capital Management Policy and the principles
underlying capital issuance and distribution. The Committee
is also responsible for governing the capital adequacy
assessment process, including overall design, assumptions
and risk streams, and for ensuring that capital stress test
programs are designed to adequately capture the
idiosyncratic risks across the Firm’s businesses.
The Firmwide Valuation Governance Forum (“VGF”) is
composed of senior finance and risk executives and is
responsible for overseeing the management of risks arising
from valuation activities conducted across the Firm. The
VGF is chaired by the firmwide head of the Valuation Control
function (under the direction of the Firm’s CFO), and
includes sub-forums covering the Corporate & Investment
Bank, Consumer & Community Banking, Commercial
Banking, Asset Management and certain corporate
functions, including Treasury and Chief Investment Office.
In addition, the JPMorgan Chase Bank, N.A. Board of
Directors is responsible for the oversight of management of
the Bank. The JPMorgan Chase Bank, N.A. Board
accomplishes this function acting directly and through the
principal standing committees of the Firm’s Board of
Directors. Risk oversight on behalf of JPMorgan Chase Bank
N.A. is primarily the responsibility of the DRPC and Audit
Committee of the Firm’s Board of Directors and, with
respect to compensation and other management-related
matters, the Compensation & Management Development
Committee of the Firm’s Board of Directors.
Risk measurement
The Firm has a broad spectrum of risk management
metrics, as appropriate for each risk category (refer to the
table on key risks included on page 108). Additionally, the
Firm is exposed to certain potential low-probability, but
plausible and material, idiosyncratic risks that are not well-
captured by its other existing risk analysis and reporting for
credit, market, and other risks. These idiosyncratic risks
may arise in a number of ways, such as changes in
legislation, an unusual combination of market events, or
specific counterparty events. The Firm has a process
intended to identify these risks in order to allow the Firm to
monitor vulnerabilities that are not adequately covered by
its other standard risk measurements.