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Risk Management (RM)
Understanding Risk Management (RM) in Europe and Key Jurisdictions
Risk Management (RM) involves identifying, assessing, mitigating, and monitoring risks to ensure an organization’s resilience and operational stability. In Europe, and particularly in Germany, Austria, Switzerland, Luxembourg, and Liechtenstein, RM frameworks are critical for managing financial, operational, market, and compliance risks. Effective RM helps institutions not only meet regulatory requirements but also safeguard their reputation and maintain stakeholder trust.
Legal and Regulatory Requirements for Risk Management
Financial institutions must comply with a comprehensive array of RM regulations to meet European and national standards.
European Union
- ECB: The European Central Bank prioritizes RM in its Supervisory Review and Evaluation Process (SREP), focusing on liquidity, credit, operational, and market risks.
- EBA: The European Banking Authority’s guidelines under CRD V emphasize a risk-based approach, requiring institutions to implement robust RM frameworks for capital and liquidity adequacy.
- EIOPA: The European Insurance and Occupational Pensions Authority mandates RM requirements under the Solvency II Directive, focusing on prudent risk management and governance.
- ESMA: The European Securities and Markets Authority enforces RM requirements under MiFID II, addressing investment and operational risks.
Germany
- BaFin and Deutsche Bundesbank: The MaRisk framework requires financial institutions to establish comprehensive RM systems covering credit, market, operational, and liquidity risks.
Austria
- FMA: Austria’s Financial Market Authority enforces RM requirements under the BWG and VAG, emphasizing proactive risk identification and management.
Switzerland
- FINMA: The Swiss Financial Market Supervisory Authority requires robust RM systems under its Circular 2017/1, including stress testing and scenario analysis.
Luxembourg
- CSSF: The Commission de Surveillance du Secteur Financier outlines RM expectations in CSSF Circular 12/552, focusing on credit, operational, and systemic risks.
Liechtenstein
- FMA: Liechtenstein’s Financial Market Authority aligns RM requirements with European directives, emphasizing the importance of risk monitoring and governance.
Leitner & Associates‘ Risk Management Solutions
We provide tailored RM solutions to ensure your institution’s resilience and compliance:
- Audit: Thorough evaluations of your RM framework to identify gaps and ensure regulatory compliance.
- Consulting: Strategic guidance to develop, implement, or optimize RM systems.
- Training: Custom training programs to equip teams with RM skills and knowledge.
- Interim Management: Experienced RM professionals to support your institution during transitions.
- Outsourcing: Comprehensive RM services to streamline operations and manage risks effectively.
Products for Risk Management Implementation
From greenfield projects to refining existing frameworks, our products support every step of RM implementation:
- Commentaries: Expert analysis and insights on RM regulations.
- Guidelines: Comprehensive frameworks for establishing RM systems.
- Policies: Clear documentation of RM roles, responsibilities, and controls.
- Procedures: Detailed processes for managing financial, operational, and compliance risks.
- Control Plans and Checklists: Practical tools for monitoring risks and ensuring compliance.
- Reports and Training Certificates: Validation and documentation of RM efforts and expertise.
Why Choose Leitner & Associates for Risk Management?
At Leitner & Associates, we specialize in creating robust RM frameworks that not only ensure compliance but also enhance your institution’s ability to navigate uncertainties. Whether starting from scratch or optimizing existing systems, our solutions are designed to meet your unique needs.