**6. Six quick wins in risk management**

After analyzing the root causes of the economic downturn and the main mistakes, it is time to provide some tips that have proven to be successful for a leading European Bank that, despite the challenging environment, has managed to excel in performance and obtain the 2011 Best Bank Award.

For this player, the quality in risk management is one if its core identity signs and thus, a top 1 line of action. For over 150 years, The Bank has combined prudency in risk management and advanced risk management techniques which have fostered recurrent and healthy turnover and value creation for its stakeholders.

The balance between The Bank's appetite for risk vs. risk control is driven by its business model and core principles:


All these principles are the main levers of The Bank's risk management guidelines. These can be summarized in six quick wins that for other industry players have turned into best practices (Figure 5):

1. Independent Risk Management Function


risk, which entitles:

2011 Best Bank Award.

model and core principles:

profits and financial results.

instrumental subsidiaries.

and in a standard format

practices (Figure 5):

aligned with its strategic objectives.

1. Independent Risk Management Function

margin to react and launch mitigation actions.

**6. Six quick wins in risk management** 

healthy turnover and value creation for its stakeholders.

1. An organizational culture funded on prudent risk management 2. Prudent and anti-cyclic policies as concerns to provisions

special emphasis on risk admission and monitoring processes

they considered was more complete and consequently in difficult times they have had more

Having said this, the key to overcome such mistakes is based upon prudent management of

3. Proactive risk management initiatives covering the whole credit life cycle; putting

After analyzing the root causes of the economic downturn and the main mistakes, it is time to provide some tips that have proven to be successful for a leading European Bank that, despite the challenging environment, has managed to excel in performance and obtain the

For this player, the quality in risk management is one if its core identity signs and thus, a top 1 line of action. For over 150 years, The Bank has combined prudency in risk management and advanced risk management techniques which have fostered recurrent and

The balance between The Bank's appetite for risk vs. risk control is driven by its business

 The Retail Business is the bulk of The Bank's activity. The Bank is present worldwide and has significant market share (>10%) in all the main markets in which it operates.

 The Bank formalizes its presence through autonomous subsidiaries, both in terms of capital and liquidity, compatible with a common corporate control model. The shareholders' structure looks to be simple, minimizing the number of non-operative or

 The Bank relies on a powerful and advanced technology infrastructure and corporate tools – which enable an agile compilation and processing of the information – timely

The Bank's activity is framed within its social and reputational commitment, fully

All these principles are the main levers of The Bank's risk management guidelines. These can be summarized in six quick wins that for other industry players have turned into best

The Global Business practice is mainly developed in The Bank's core markets. Based upon strong capital and liquidity, The Bank's business model enables recurrent

**Figure 5.** Quickwins in Risk Management

### **6.1. Independent risk management function**

The Risk Management function has to be separated from daily operations. In this sense, The Bank counts on a Risks Management Unit, with its own Head of Department reporting directly to the Executive Board. Such Unit is responsible for risk admission and monitoring processes and acts on an autonomous way and thinking Global.

### **6.2. Heavily involved executive board**

The Senior Management of The Bank is aware of the importance of Risk Management and thus, inspires such culture and principles to the rest of the organization.
