BBVA in 2012

Global Risk Management:BBVA Group’s riskmanagement functionIn the field of risk management, the Board of Directors is responsible for approving therisk control and management policy, as well as periodically monitoring internal reportingand control systems. In order to properly perform this duty, the Board is supported by theExecutive Committee and a Risk Committee. Both the corporate Global Risk Management(GRM) area and the risk units in the business areas also play an essential role in the Group’srisk management, each with well defined roles and responsibilities. The corporate GRM areaestablishes the global risk management strategies and policies, while the risk units in thebusiness areas propose and maintain the risk profile of each customer independently, butwithin the corporate framework for action.The Group’s risk function is a unique, independent and global function whose principles are:• The assumed risks must be compatible with the target capital adequacy and must be identified,measured and assessed. Monitoring and management procedures and sound control andmitigation systems must likewise be in place.• All risks must be managed integrally during their life cycle. They must be treated differentlydepending on their type and with active portfolio management based on a common variable:economic capital.• It is each business area’s responsibility to propose and maintain its own risk profile bothindependently and within the corporate action framework (defined as the set of risk policies andprocedures), using an adequate risk infrastructure.• The risk infrastructure must be suitable in terms of people, tools, databases, informationsystems and procedures so that there is a clear definition of roles and responsibilities,ensuring efficient allocation of resources between the corporate area and the risk units inthe business areas.The Group has developed an integrated risk management system based on these principles andstructured around three main core elements:• A set of tools, circuits and procedures that make up different management schemes.• A system of internal controls.• A corporate risk governance plan which separates functions and responsibilities.Board ofDirectorsRiskCommitteeCorporateRiskCommitteesRisk Committeesin the risk unitsof the businessareas90 Risk management