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Management report
evaluation of risk-reducing collateral. In the corresponding calcula-
tions, we take the varying risk levels inherent in different credit ac-
tivities duly into account.
The sales units are supported by the risk management department
in the management process through the measurement and mon-
itoring of credit risk and impending macroeconomic risks, and by
the credit management department in the operational manage-
ment of normal and problematic exposures. In the reporting sys-
tem, various reference date and forecast analyses form an integral
part of the risk profile and assist in guaranteeing an active across-
the-board risk management process.
The various credit risk-related tasks and organisational processes
as well as the credit risk strategy laid down annually by the man-
agement board are clearly described on the intranet, in the cred-
it manual and in the product manuals. Furthermore, all employ-
ees involved in the execution of transactions are instructed in these
tasks and process, which are also available online. This ensures in
every individual case that any risk taken on is in compliance with
our risk policies and risk strategy. In addition, in keeping with prin-
ciples of commercial prudence, ample provision is made for all ex-
isting risks.
In line with supervisory law requirements and recommendations,
as well as potential operational benefits, Raiffeisen-Landesbank Ti-
rol AG has set itself the goal of continuously developing and im-
proving its risk management processes as well as its risk evalua-
tion and monitoring methods.
Market risk
Market risk is the risk of interest rate, exchange rate, price and
spread changes adversely affecting securities, interest and curren-
cy positions. Market risk is generated by both bank book and trad-
ing book transactions.
Raiffeisen-Landesbank Tirol AG uses a combination of risk meas-
urement parameters to manage market risks and set associated
limits. The treasury department manages market risk, systematical-
ly compiling all interest, currency and price-sensitive positions and
controlling them in line with the prevailing market situation. Along-
side the credit business, the bank’s own account trading consti-
tutes another core line of business.
The risk management department supports the treasury depart-
ment in controlling market risks. The measurement and monitor-
ing of market risk and regular reporting are the central tasks in
this respect. The dynamic risk-monitoring process involves giv-
ing particular emphasis to the systematic monitoring of strategic
and hedging positions. Daily risk and performance analyses and
reports ensure that the treasury department provides appropriate
steering impetus.
Liquidity risk
At Raiffeisen-Landesbank Tirol AG, we set great store by refinanc-
ing with matching maturities, and this policy is supported by a key
liquidity figures system and associated limits, duly distinguishing
here between short-term operational and longer-term structural li-
quidity management and also liquidity price risk. The unexpected
withdrawal of customer deposits is classified as short-term liquidi-
ty risk, and increased own refinancing costs as a result of the refi-
nancing structure as structural liquidity risk or liquidity price risk.
Compliance with limits is monitored by the risk management de-
partment. Various liquidity scenarios are used to simulate ade-
quate supplies of short- and long-term liquidity during hypothetical
financial squeezes. To reinforce liquidity, Raiffeisen-Landesbank Ti-