Ársskýrsla Landsbankans - Landsbankinn

Notes to the Consolidated Financial Statements
80. Foreign exchange rates used
The following foreign exchange rates were used by the Group:
At 31
December
2010
At 31
December
2009 % Change
Average for Average for
2010 2009
EUR/ISK 153.80 179.70 (14.4%) 162.66 171.80
GBP/ISK 179.09 201.15 (11.0%) 189.30 192.28
USD/ISK 114.69 124.60 (8.0%) 122.26 122.96
JPY/ISK 1.41 1.35 4.7% 1.40 1.32
CHF/ISK 122.75 121.01 1.4% 118.01 114.08
CAD/ISK 115.35 118.78 (2.9%) 118.08 108.12
DKK/ISK 20.63 24.15 (14.6%) 21.84 23.07
NOK/ISK 19.71 21.64 (8.9%) 20.26 19.62
SEK/ISK 17.07 17.49 (2.4%) 17.02 16.22
Operational risk
81. Operational risk
Operational risk is the risk of financial losses resulting from the failure or inadequacy of internal processes or systems, from employee error or from
external events. Operational risk includes legal risks, but excludes reputational risks. It is therefore inherent in all areas of business activities.
Whereas the managing director of each division is responsible for that division’s operational risk, the daily management of operational risk is in the
hands of department heads. The Bank establishes, maintains and co-ordinates its operational risk management framework on a group level. This
framework complies with the Basel Committee’s 2003 publication "Sound Practice for the Management and Supervision of Operational Risk" and
meets the new regulatory requirements which concern the solvency ratio. The Bank ensures that operational risk management stays consistent
throughout the Bank by upholding a system of prevention and control that entails detailed procedures, permanent supervision and insurance policies,
together with active monitoring by the Internal Audit Department. By managing operational risk in this manner, the Bank intends to ensure that all
of the Bank’s business units are kept aware of any operational risks, that a robust monitoring system remains in place and that controls are
implemented efficiently and effectively.
In 2009 and 2010 the Bank has experienced increased turnover in key personnel, especially lawyers and personnel with IT competences. This increase
in turnover may in the short term impact the Bank's Bank s ability to execute its policies and increases the operational risk of the Bank Bank.
NBI hf. Consolidated Financial Statements 2010 74
All amounts are in ISK million
174 Ársreikningur 2010 Allar upphæðir eru í milljónum króna