Risk Management in NBP

The basic types of financial risk inherent in the operations of NBP, associated with the management of the foreign exchange reserves and the conduct of monetary policy, are the following: credit risk, market risk (interest rate risk and exchange rate risk) and liquidity risk

The basic types of financial risk inherent in the operations of NBP, associated with the management of the foreign exchange reserves and the conduct of monetary policy, are the following: credit risk, market risk (interest rate risk and exchange rate risk) and liquidity risk

Financial risk

The basic types of financial risk inherent in the operations of NBP, associated with the management of the foreign exchange reserves and the conduct of monetary policy, are the following: credit risk, market risk (interest rate risk and exchange rate risk) and liquidity risk. The accepted level of financial risk is defined by the system of limits approved by the NBP Management Board and established in a way that also takes into account the mitigation of concentration risk.

The Financial Risk Management Department is responsible for the management of financial risk at NBP. It develops the methodology of establishing investment limits and the criteria for selecting counterparties, sets the levels of limits, and conducts ongoing supervision of their compliance, and also prepares regular analyses and reports on financial risk exposures, which are presented to the NBP Management Board.

Operational risk

A system of operational risk management is in place at NBP which covers the following:

  • decentralised management of operational risk – performed by the directors of the Head Office departments and the Regional Branches of NBP, who monitor operational risk, assess its level and take action to limit the occurrence of risk in their organisational units;
  • the activities of the Operational Risk and Compliance Department, which monitors and analyses operational risk at NBP on a daily basis, develops the tools for operational risk management at NBP, draws up regulations and proposals of solutions regarding changes to the operational risk management processes, and also trains NBP employees in operational risk. It also prepares reports on operational risk for the Operational Risk Management Commission and the NBP Management Board;
  • the activities of the Operational Risk Management Commission, which assesses the effectiveness of the operational risk management system at NBP, monitors the current level of operational risk, and analyses the causes of risk at a high or unacceptable level. It also recommends proposals of solutions and changes in this respect to the NBP Management Board;
  • the activities of the NBP Management Board, which takes strategic decisions in this area, including on the basis of submitted reports regarding operational risk.

See also