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Risk management

The importance of risk management and the areas of responsibility

Risk management is of central importance for maintaining Finnvera’s ability to take risks, managing equities, and for attaining economic objectives in the long-run. The goal of risk management, for its part, is to ensure the prerequisites for implementing the company’s strategy.

Finnvera’s Board of Directors and Executive Management are responsible for arranging and organising internal control and risk management. The Board of Directors approves decision-making powers, the principles of risk management, and risk policies. The Board and its Inspection Committee receive quarterly reports on the Group’s overall risk position and any changes that have taken place.

As the business units and Group companies answer for the day-to-day management of business and for risk management measures, they also bear the primary responsibility for internal control and risk management. These risk management measures have been incorporated into the processes of the operating system and are implemented by the entire organisation.

Finnvera’s risk control, compliance and other support operations, which are independent of the company’s business operations, support the business units in their risk management and internal control. Risk control is responsible for developing risk management methods, issuing guidelines for operations, monitoring the Group’s risk position, and for reporting to the Board of Directors and to the Executive Management.

Risk management procedures

Finnvera’s Board of Directors confirms the principles of the Group’s risk management, the goals of risk-taking, the policies to be observed, the outlines of risk-taking, and decision-making powers.

Finnvera’s risks can be grouped as follows:

  • Risks pertaining to credits and guarantees
  • Operational risks
  • Liquidity and market risks
  • Other risks.

The willingness to take risks by risk type is defined so that the equities and other risk buffers available are at an adequate level in view of the risk level of the operations planned. With respect to credit risks, the willingness to take risks depends on various factors, including the amount of credit loss compensation paid by the State for each type of enterprise. The adequacy of equities is assessed regularly.

Operational risks pertaining to financial reporting are identified, assessed, and controlled as part of operational risk management.

The internal reporting system for risk management works at all levels of the Group. The parent company manages risks arisen in subsidiaries through ownership steering and by keeping all subsidiaries within the sphere of the risk management practised within the Group.

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