Back Office Front Office Investment Operations Analysis Portfolio Management Systems Risk Management 1

Back Office Front Office Investment Operations Analysis Portfolio Management Systems Risk Management 2

Chapter III Risk management 1 2 3 4 5 Overview Policy operations Risk management framework of policy operations Investment operations Risk management framework for investment operations 84 84 85 86 87

( d ) processing corporate actions on behalf of customers

( d ) processing corporate actions on behalf of customers

Division Front Office Division Operations Analysis Division Back Office Division Portfolio Management Systems Division Own Funds Management

Divisions Back Office Front Office Investment Market Operations Analysis Market Operations Systems Risk Management 2

Risk 5.1 5.2 5.3 5.4 management Introduction Investment operations Monetary policy and payment systems operations Current developments

12 The ECB 's risk management framework for investment operations was further enhanced during 2006 .

Considerable resources are devoted to the development of the methodology used in the asset allocation process .

Risk management at the ECB has two main areas , namely policy operations and investment operations .

Printer management basic operations are supported (add remove modify).

MANAGEMENT SUPERVISION OF OPERATIONS WITH MARKET COUNTERPARTIES

ECB Executive Board Sirkka Hämäläinen Directorate General Operations F. Papadia Directorate Controlling and Organisation K. Gressenbauer Division Budget and Projects Division Organisational Planning

Moreover , they under take foreign reser ve management operations on their own account and as agents for the ECB .

In 2009 the ECB continued to enhance the IT infrastructure supporting the risk management framework for its investment operations .

ECB Annual Report 2002 III

A framework for identifying , monitoring and managing risks arising from these operations is in place .

RISK MANAGEMENT ISSUES The ECB 's risk management function measures , monitors and reports all risks resulting from financial operations undertaken by the ECB directly or by the 12 NCBs of the Eurosystem on behalf of the ECB .

( c ) refer to the fact that certain transactions within the framework of the Eurosystem reserve management services shall be carried out on a best effort basis

( c ) refer to the fact that certain transactions within the framework of Eurosystem reserve management services shall be carried out on a best effort basis

RISK MANAGEMENT ISSUES Risk management in the context of the Eurosystem 's policy operations ( i.e. monetary policy or payment systems credit operations ) focuses mainly on the credit risk the Eurosystem incurs when providing central bank funds to a counterparty , although other types of risk are also taken into account .

MANAGEMENT OF THE FOREIGN RESERVES The following foreign exchange swap and forward transactions remained outstanding , in the context of the management of the ECB 's foreign reserves , as at 31 December 2009 Foreign exchange swap and forward transactions Claims Liabilities 2009 Euros 2008 Euros Change Euros

To be eligible for participation in foreign reserve management operations , counterparties must meet minimum rating criteria and satisfy certain operational requirements .

One of the most important reasons for managing the foreign reserves portfolio is to ensure that the ECB has sufficient liquidity to conduct its foreign exchange operations .

These preparations covered a wide range of areas , notably financial reporting and accounting , monetary policy operations , foreign reserve management and foreign exchange operations , payment systems , statistics and banknote production .

They relate in particular to capital adequacy , intra group transactions and risk concentration , as well as the management .

the ECB and the transactions relating to such management require specific documentation for operations involving the ECB 's foreign reserves .

The Market Operations Committee ( MOC ) assists in the execution of monetary policy operations and foreign exchange transactions , including those related to the operation of ERM II , and to the management of the ECB 's foreign reserves .

Access will be granted to information that is more than one year old in areas such as monetary policy decisions , or operations related to the management of foreign reserves and interventions on foreign exchange markets .

The Market Operations Committee ( MOC ) assists the Eurosystem in carrying out monetary policy operations and foreign exchange transactions , and in managing the ECB 's foreign reserves and the operation of ERM II .

Many Latin American economies continued to take advantage of the still benign international financing conditions to engage in active debt management operations , in part through outright buybacks as well as swaps , in a bid to reduce debt servicing costs and improve maturity profiles .

A net realised loss resulted from normal portfolio management transactions in securities owing to significant falls in the prices of securities held during the course of 1999 .

These preparations covered a wide range of areas , notably financial reporting and accounting , monetary policy operations , foreign reserve management and foreign exchange operations , payment systems , statistics and banknote production .

market management , human resources , production management and project management consulting

they also may be included in a broader strategy of risk management or be used in the framework of other financial derivatives operations .

OWN FUNDS MANAGEMENT The ECB 's own funds portfolio consists of the invested counterpart of the ECB 's paid up capital , as well as amounts held from time to time in its general reserve fund and its provision against foreign exchange rate , interest rate and gold price risks . The purpose of this portfolio is to provide the ECB with income to help to cover its operating expenses .

Chapter III Risk management 1 Policy operations 1.1 Risk control framework 1.2 Credit risk assessment Investment operations Future developments for 2002 78 78 79 80 81

All of the associations were against suspending the LTROs , as were 31 of the 42 individual credit institutions . They said that the LTROs still play an important role in liquidity management

RISK MANAGEMENT RELATED TO THE PROVISION OF CREDIT IN MONETARY POLICY AND PAYMENT SYSTEMS OPERATIONS In policy operations ( i.e. monetary policy or payment systems credit operations ) , when the Eurosystem enters into a transaction with a counterparty , it incurs the risk that the counterparty may be unable to meet its credit obligations .

The objective of portfolio management is to generate returns over the long term in excess of the average main refinancing rate of the ECB .

When defining the type of transactions and risks , the relevant competent authorities shall take into account the specific group and risk management structure of the financial conglomerate .

THE EFFICIENCY OF THE MANAGEMENT IN 2001 .

THE EFFICIENCY OF THE MANAGEMENT IN 2001

possibilities to process card payments . The separation between scheme management and processing must be effective and not just on paper .