Financial Crime World

Here is the article rewritten in Markdown format with proper headings, subheadings, and bullet points:

LLB AG Implements Comprehensive Compliance Risk Management Strategies

==============================================

Liechtenstein-based banking group LLB AG has taken a proactive approach to mitigate potential risks and ensure a stable financial future. The institution’s risk policy is guided by the Liechtenstein Banking Law, the Basel Committee for Banking Supervision principles, and its own statutes and business regulations.

Governance Structure

The Board of Directors oversees basic risk policy and continuously monitors the bank’s exposure to various risks. This process is supported by the Risk Committee, while the Board of Management assumes overall responsibility for risk management, working in tandem with separate expert committees.

Market Risks Mitigation Strategies

LLB AG primarily faces interest rate fluctuation, share price, and currency risks due to its business activities. To manage these market-related risks, the Group Risk Management Committee employs:

  • Sensitivity analyses: These measures help limit exposure to potential losses.
  • Value-at-risk assessments: These assessments enable the bank to quantify potential losses.

Credit Default Risks Management

The bank extends credits primarily in interbank transactions, private client, and corporate business on a secured basis. The Group Credit Risk Committee oversees credit risk management, ensuring that lending is conducted within strict approval procedures. Additionally:

  • An internal rating system determines risk-related terms and conditions.
  • Credits are extended based on the loan-to-value ratio, which is determined using an internal work manual.

Real Estate Valuations

To ensure responsible lending, LLB AG employs professionally recognised methods for valuing properties, including:

  • The tangible asset method in Liechtenstein
  • Hedonic valuation in Switzerland

To limit exposure to operational and legal risks, LLB AG relies on internal regulations and directives. These instructions are formulated by the Operational Risk Committee and regularly checked by Group Compliance, Group Operational Risk / ICS departments, and external legal experts as needed.

Liquidity Risks Management

The bank monitors and manages liquidity risks in accordance with banking law provisions to ensure regulatory compliance and maintain a stable financial position.

Derivative Financial Instruments

Within the scope of balance sheet management, interest rate swaps are concluded to hedge interest rate fluctuation risks. Additionally:

  • Derivative financial instruments are employed primarily within client transactions, including both standardised and OTC derivatives traded on behalf of clients.

By implementing these comprehensive compliance risk management strategies, LLB AG demonstrates its commitment to ensuring a stable financial future for its stakeholders while maintaining regulatory compliance in Liechtenstein’s banking sector.