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No change in risk management principles

Risk Management Group (RMG) is responsible for assessing and monitoring risks across Macquarie

  • RMG’s oversight of risk is based on five key principles:

Independence

  • RMG is independent of the operating areas of Macquarie

  • Head of RMG, as Macquarie’s Chief Risk Officer, reports directly to the Managing Director and Chief Executive Officer, with a secondary reporting line to the Board Risk Committee (BRC)

  • Replacement, appointment, reassignment or dismissal of the Head of RMG is approved by the BRC

Centralised prudential management

  • RMG’s responsibility covers the whole of Macquarie. Therefore, it can assess risks from a

Macquarie-wide perspective and provide a consistent approach across all operating areas

  • RMG approval is required for all material risk acceptance decisions

Approval of all new business activities

  • Operating areas cannot undertake new businesses or activities, offer new products, or enter new markets without first consulting and then obtaining subsequent approval from RMG

  • RMG reviews and assesses risk and sets prudential limits. Where appropriate, these limits are approved by the Executive Committee and the Board

  • RMG Operational Risk is the final signoff of new business activities

Continuous assessment

  • RMG continually reviews risks to account for changes in market circumstances and

developments within Macquarie’s operating areas

Frequent monitoring

  • Centralised systems exist to allow RMG to monitor credit and market risks daily. RMG staff liaise

closely with operating and support divisions

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