Effective risk and capital management is a basic prerequisite for the success and the stability of a bank.
VP Bank understands this term to mean the systematic processes to identify, evaluate, manage and monitor the relevant risks as well as the steering of the capital resources and liquidity necessary to assume risks and guarantee risk tolerance.
Risk policy which has been laid down by the Board of Directors of VP Bank Group constitutes the mandatory operating framework in this respect. It includes detailed, clearly defined objectives for specific goals and principles, organisational structures and processes, methods and instruments as well as targets and limits.
Capital and balance-sheet structure management
As part of capital and balance-sheet-structure management, compliance with regulatory requirements and the fulfilment of business needs is monitored on an on-going basis. Using an internal process to assess the adequacy of capital resources (Internal Capital Adequacy Assessment Process), the possible adverse effect on the equity basis in stress situations are simulated and analysed.
Within the scope of liquidity management, compliance with regulatory requirements and the fulfilment of business needs is subjected to on-going monitoring. Using stress tests, possible adverse scenarios are simulated and the impact on liquidity in stress situations analysed.
Because of the importance of the client lending business, the management and monitoring of credit risks continues to play a central role.
As a result of its comfortable liquidity and equity situation, the risk tolerance of the Bank was assured at all times even after the SNB decision. The monitoring and management of market risks remains of central importance in 2017.
Operational risks (OpRisks)
The systematic management of operational risks was further developed in VP Bank in 2016. The centre of the efforts in this respect was the performance of risk assessments in the parent bank and in Group subsidiaries as well as the further consolidation and optimisation of the existing internal control system (ICS).