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Risk Management Overview
Overview
At Shinsei Bank, we emphasize that "risk is an element of our business, concerning all employees." We endeavor to foster risk-aware culture throughout our organization. We must take risk, and we do so in an intelligent, disciplined and collaborative manner.
The Risk Management Group works in partnership with all business units to ensure that risks are fully acknowledged and properly balanced with returns, while establishing a set of policies and guidelines. Quantitative and consistent risk analysis is regularly provided to decision makers, ensuring that they reach balanced judgments. Ongoing performance is rigorously monitored and reported to senior management so that the Bank's activities are fully analyzed. Risk management is conducted on an integrated basis. The Risk Management Group quantifies a variety of risks throughout the organization, including credit, market and operational risk, along with relevant correlations. In addition to calculating the risk portfolio’s expected loss, we also estimate Risk Capital (also known as 'economic capital' ), which is our measurement of unexpected loss to a statistical degree of confidence agreed upon in partnership with senior management. The Risk Management Group attributes Risk Capital to all transactions and activities, thereby ensuring that risk is managed consistently with other business indicators. Shinsei strives to meet the highest global standards in risk management.
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Comprehensive Risk Management
Basic Concept of Risk Management Systems
In order to run highly-profitable operations, a financial institution must understand the basic challenges of risk management, namely, how to take and how to face risks.
For this reason, it is necessary to monitor whether risks are taken in line with Bank-wide policies as well as individual operational policies, whether risks remain within appropriate limits and whether they are adequately controlled by the respective sections in charge.
Financial institutions are exposed to various risks, including credit risk, market risk, liquidity risk, operational risk, systems risk, legal risk and compliance risk.
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Annual Report 2008 Risk Management  (143KB) |
Latest revision: July 1, 2008