Informe_Anual_Cecabank

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Page. 73 Cecabank 2015 Annual Report
Lastly, in line with the goal of enhancing corporate
governance and maintaining the risk profile described
earlier, Cecabank defined a “Risk Tolerance Framework”.
In this document, Cecabank’s appetite for risk is defined,
i.e. the quantity and type of important risks which it is
considered reasonable to assume in the execution of the
business strategy, in such a way that ordinary business
can continue as normal if unexpected events occur.
It also aims to give an aggregate view of the bank’s risk
profile by using quantitative and qualitative metrics.
This also enables the governing bodies and senior
management to assess the coherence between the
present and forecast risk profile for strategic and
business plans and the maximum risk limits established
Another important event for Cecabank in 2015 was the
upgrade of Moody’s rating by four notches, taking the
rating up to investment grade. This aligns all the bank’s
credit ratings at level 3, the same as the rating for Spain.
Some of the strong points Cecabank’s rating agencies
highlight are its sound franchise in the domestic
securities services business, which is a stable source of
income, its sound capitalization, which is in line with its
risk profile, and its comfortable liquidity position.
What are the main challenges for the risk function in
the coming years?
In my opinion, the main challenges facing the risk
functions at financial institutions in general and
Cecabank in particular in the coming years are:
Adding all the regulatory changes to internal
procedures and implementing them, and adapting
to the new supervisory framework.
Identifyingandanticipatingemerging risks, stemming
from the economic, geopolitical and regulatory
context and from digital innovation and change.
Here, because of the importance it might have for an
entity like ours, I would highlight the identification of risks
linked to the development of new market infrastructures,
such as central counterparties and clearing houses in
different segments like securities, treasury products and
means of payment.
And, lastly, the most important challenge would be:
To reconcile the risk function with the objectives of the
different business units, which are under a great deal
of pressure because of the low yields in the sector and
all of this in an uncertain macro environment and a
very competitive economic environment.
03 Our Business Model