The ability to monitor and keep risks under control at all times is essential for the successful management of business development at MünchenerHyp. For this reason, risk management plays a very important role in the overall management of the Bank.
The business and risk strategy defines the parameters of the Bank’s business activities. MünchenerHyp’s entire Board of Management is responsible for this strategy, which is regularly reviewed regarding the attainment of goals and updated as necessary and then submitted to the Supervisory Board no less than once a year.
As part of its supervisory duties, the Supervisory Board is advised about the Bank’s risk profile no less than on a quarterly basis and additionally as required. This takes place using the reports concerning the Bank’s risk-taking capabilities and lending risks, the OpRisk reports, as well as the risk report prepared in accordance with the “Minimum Requirements for Risk Management” (MaRisk).
The basis of risk management consists of, on the one hand, the analysis and presentation of existing risks, and, on the other, comparing these risks with the risk cover potential (ability to bear risk). Furthermore, a series of additional relevant analyses are in place and only when they are viewed as a whole do they permit the Bank to be managed appropriately. This objective is achieved by employing appropriate monitoring processes involving internal process-dependent supervision measures. Our internal audit department, as a process-independent unit, plays an additional monitoring role within the Bank.
The analysis and presentation of existing risks primarily distinguishes between counterparty, market price, credit spread, liquidity, investment, modelling and operational risks. Additional risks such as placement risks, reputational risk, business risk etc., are viewed as parts of the abovementioned risks and are taken into consideration at the appropriate place in the individual calculations.