Balance Sheet at 31 December 2010 of BBVA

During the first half of the year, there was higher exposure to interest rates by some of the
Group companies in South America and Bancomer, as interest rates were expected to
fall. When they did, this meant significant cutbacks in the short part of the local curves.
This has a positive impact on the earnings from business volumes. This greater exposure
was limited gradually, as the central banks began to stabilise their interest rates,
contributing to a reduction in the market risks in the region. This was taken up positively by
the markets, which showed a reduction in volatility. During the second half of 2010, the
Group's market risk performance was marked by increased exposure in Global Markets
Europe, especially in long-term interest rates and equities volatility.
D.3. Indicate whether there is any committee or other decision-making body in charge of establishing
and supervising these control mechanisms.
YES
If so, describe its duties:
Name of the Committee or Body
RISKS COMMITTEE
Description of duties
According to the recommendations of the Basel Committee, monitoring and supervision of risk
management at financial entities is the duty of the board of directors which is the ultimate body
responsible for approval and periodic review of the bank's strategies and policies on risk,
reflecting its risk tolerance and the expected level of return. However, the growing complexity of
risk management at financial institutions requires them to define a risk profile that matches their
strategic goals. They must advance gradually, as circumstances permit, towards a model that
establishes a system of delegation based on amounts and ratings. This also applies to active
tracking of exposure to quantifiable risks by means of a map of risk capital, expected losses and
control on non-quantifiable risks.
Thus analysis and periodic tracking of risk management with regard to the attributes of the
administrative bodies of the bank, made it advisable to set up a specific board committee for
this purpose. Within the scope of its defined functions, this committee should apply the
necessary dedication to analyse the way risk is handled in the entire Group. Consequently,
the Risks committee of the Board has been assigned the following duties, in accordance with the
board regulations:
. Analyse and evaluate proposals related to the Group's risk management and oversight
policies and strategy. In particular, these shall identify:
a) The setting of the level of risk considered acceptable according to the risk profile (expected
loss) and capital map (risk capital) broken down by the Group’s businesses and areas of activity;
b) The internal reporting and internal control systems used to oversee and manage risks;
c) The measures established to mitigate the impact of the risks identified,
should they materialise.
. Monitor the match between risks accepted and the profile established.
. Analyse and approve any risks that might compromise the Group's capital adequacy or
recurrence of its earnings or might entail significant operational or reputation risk.
. Check that the Group possesses the means, systems, structures and resources
WARNING: The English version is only a translation of the original in Spanish for information purposes. In case of a discrepancy,
the Spanish original prevails.