Balance Sheet at 31 December 2010 of BBVA

Translation of financial statements originally issued in Spanish and prepared in accordance with generally accounting principles Spain
(See Note 1 and 54). In the event of a discrepancy, the Spanish-language version prevails.
systems must likewise be in place.
• All risks must be managed integrally during their life cycle, being treated differently depending on
their type and with active portfolio management based on a common measurement (economic
capital).
• It is each business area’s responsibility to propose and maintain its own risk profile, within their
independence in the corporate action framework (defined as the set of risk policies and procedures),
using a proper risk infrastructure.
• The risk infrastructure must be suitable in terms of people, tools, databases, information systems
and procedures so that there is a clear definition of roles and responsibilities, ensuring efficient
assignment of resources among the corporate area and the risk units in business areas.
Building on these principles, the Bank has developed an integrated risk management system that is
structured around three main components: (i) a corporate risk governance regime, with adequate
segregation of duties and responsibilities (ii) a set of tools, circuits and procedures that constitute the various
different risk management regimes, and (iii) an internal control system.
CORPORATE GOVERNANCE SYSTEM
The Bank has a corporate governance system which is in keeping with international recommendations and
trends, adapted to requirements set by regulators in each country and to the most advanced practices in the
markets in which it pursues its business.
In the field of risk management, it is the board of directors that is responsible for approving the risk control
and management policy, as well as periodically monitoring internal reporting and control systems.
To perform this function correctly the board is supported by the Executive Committee and a Risk Committee,
the main mission of the latter being to assist the board in undertaking its functions associated with risk
control and management.
Under Article 36 of the Board Regulations, the Risk Committee is assigned the following functions for these
purposes:
• Analyze and evaluate proposals related to the Bank's risk management and oversight policies and
strategies.
• To monitor the match between risks accepted and the profile established.
• To assess and approve, where applicable, any risks whose size could compromise the Bank’s
capital adequacy or recurrent earnings, or that present significant potential operational or
reputational risks.
• To check that the Bank possesses the means, systems, structures and resources in accordance with
best practices to allow the implementation of its risk management strategy.
The risk management function is distributed into the Risk Units of the business areas and the Corporate
Area, which defines the policy, strategies, methodologies and global infrastructure. The Risk Units in the
business areas propose and maintain the risk profile of each client independently, but within the corporate
framework for action.
The Corporate Risk Area combines the view by risk type with a global view. It is made up of the Corporate
Risk Management unit, which covers the different types of risk, the Technical Secretary responsible for
technical comparison, which works alongside the transversal units: such as Structural Management & Asset
Allocation, Risk Assessment Methodologies and Technology, and Validation and Control, which include
internal control and operational risks.
Using this structure, the risk management system insures the following: first, the integration, control and
management of all the Group’s risks; second, the application of standardized risk principles, policies and
metrics throughout the entire Group; and third, the necessary insight into each geographical region and each
business.
This organizational scheme is complemented by different committees, which include the following:
• The task of the Global Internal Control and Operational Risk Committee is to undertake a review at
the level of the Group and of each of its units, of the control environment and the running of the
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