Note 15 Risk management General The Board has established various policies for management and control of key risks. The policies, which are updated regularly, describe both quantitative risk limits and relevant qualitative guidelines. The Board receives compliance and risk control reports relating to the established policies, from the administration regularly and as required. The Bank is exposed to different types of business risk. Operational risk and credit risk are two key risks discussed in greater detail below. Operational risk The Bank’s strategy for operational risk is defined in the Bank’s policy for operational risk. According to the Bank’s general principles, there shall be procedures for identifying and reporting operational risk. Operational risk shall be measured and managed based on systematic assessments of operational risk factors and operational risk assessments. This shall be included as an integral part of the decision-making process in the Bank. The measurement methods applied shall fulfil the measurement methods for main categories of risk. Credit risk The Bank’s general strategy for credit risk is defined in the Bank’s credit policy. The general principles stipulate, among other things, the following: Ǵ The Bank’s loans shall only be to private individuals. Ǵ The Bank’s loans shall be well diversified. Ǵ All customers shall be subject to a credit assessment. Ǵ In addition to credit score rules, the customer must also be accepted in accordance with the Bank’s policy rules and the Bank’s requirements for ability and willingness to pay. 70 Notes to the financial statements
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