Risk Management

Risks related to banking operations have become increasingly diverse and complex in line with dramatic changes in the financial industry spearheaded by liberalization and internationalization of markets. As a result, effective risk management is becoming more important than ever.

Basic Policies
To maintain and improve the soundness of its operations, the Bank accords top management priority to upgrading its risk management systems and capabilities. Various types of risk are addressed according to the Bank’s Comprehensive Risk Management Regulations and other guidelines. Every six months, the Board of Directors determines basic policies for managing various risks. Based on these policies, the Bank continually reinforces its risk management systems and raises the quality of risk management. By keeping its risk exposure within acceptable limits, management seeks to achieve an optimal balance between the dual objectives of maintaining sound operations and strengthening earnings power.
   The Bank conducts accurate analyses and measurements to obtain an accurate grasp of credit risk and market risk. We place emphasis on maintaining ample earnings while keeping risks at levels that reflect the Bank’s operational strength. With respect to operations risk and system risk, we feel it is necessary to minimize risk by improving the accuracy and reliability of processes while ensuring comprehensive checks and balances.

Types of Risk Management
The Bank established the Business Administrative Division to take centralized control of its risk management systems, in order to strengthen management of various types of risk, including credit risk and market risk (interest rate, price fluctuation, and exchange risks), as well as liquidity risk, operations risk, and system risk. In the process, we work to implement management policies in an appropriate and timely manner.

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