Last checked at 18 Mar 2016 16:38
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Managing risk | 101 |
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Risk management framework | 101 |
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Governance and structure | 102 |
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Responsibilities | 104 |
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Processes | 105 |
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Risk factors | 108 |
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Risk governance | 193 |
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Risk appetite | 194 |
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Top and emerging risks | 110 |
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Externally driven | 110 |
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Internally driven | 114 |
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Areas of special interest | 116 |
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Financial crime compliance and regulatory compliance | 116 |
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The Monitor | 116 |
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Regulatory stress tests | 116 |
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Oil and gas prices | 117 |
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Metals and mining | 117 |
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Mainland China exposures | 117 |
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Credit risk | 118 | 195 |
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Liquidity and funding | 154 | 204 |
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Market risk | 166 | 210 |
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Operational risk | 176 | 217 |
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Compliance risk | 178 | 217 |
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Legal risk | 218 |
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Global security and fraud risk | 218 |
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Systems risk | 219 |
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Vendor risk management | 219 |
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Risk management of insurance operations | 180 | 219 |
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Other material risks | 189 |
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Reputational risk | 189 | 224 |
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Fiduciary risk | 189 | 224 |
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Pension risk | 189 | 225 |
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Sustainability risk | 190 | 226 |
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1 Appendix to Risk - risk policies and practices. | |||||
For details of HSBC's policies and practices regarding risk management and governance see the Appendix to Risk on page 193.
Managing risk
All of our activities involve, to varying degrees, the measurement, evaluation and management of risk or combinations of risks.
Our conservative risk profile
We maintain a conservative risk profile which encompasses the following:
Financial position
· Strong capital position, defined by regulatory and internal capital ratios.
· Liquidity and funding management for each operating entity, on a stand-alone basis.
Operating model
· Returns generated in line with risk taken.
· Sustainable and diversified earnings mix, delivering consistent returns for shareholders.
Business practice
· Zero tolerance for knowingly engaging in any business, activity or association where foreseeable reputational risk or damage has not been considered and/or mitigated.
· No appetite for deliberately or knowingly causing detriment to consumers arising from our products and services or incurring a breach of the letter or spirit of regulatory requirements.
· No appetite for inappropriate market conduct by a member of staff or by any Group business.
Risk management framework
Managing risk effectively is fundamental to the delivery of our strategic priorities. In doing so, we employ a risk management framework at all levels of the organisation and across all risk types. It fosters the continuous monitoring of the risk environment and an integrated evaluation of risks and their interactions. It also ensures that we have a consistent approach to risk management across the Group.
Our enterprise risk management framework is underpinned by our risk culture and is reinforced by the HSBC Values and our Global Standards. These are instrumental in aligning the behaviours of individuals with the Group's attitude to assuming and managing risk and helping to ensure that our risk profile remains in line with our risk appetite.
Our enterprise risk management framework is set out overleaf.