Financial Crime World

Here’s the article in Markdown format with proper headings, subheadings, and bullet points:

Risk Management Practices of LLB Group

The LLB Group is a financial institution that emphasizes risk-conscious credit policies and robust compliance measures. Here are some key highlights from their comprehensive report on risk management practices.

Lending Practices

  • Risk-Conscious Credit Policy: The group pursues high standards for lending to ensure responsible borrowing practices.
  • Independent Credit Decisions: Credit decisions are made independently by the back office (Group Credit Management and Credit Committees) to avoid conflicts of interest.
  • Secured Loans: Loans are primarily secured by mortgages in the market regions of Liechtenstein, north-eastern Switzerland, and the region of Zurich.

Compliance Risks

  • Compliance Organization: The group has a dedicated compliance organization that focuses on combating money laundering, financing terrorism, tax compliance, and regulatory requirements.
  • Three Lines of Defense Model: The organization is part of the risk management framework and uses the three lines of defense model:
    • First line: Business operations
    • Second line: Monitoring and control
    • Third line: Internal audit

Money Laundering and Terrorist Financing

  • Strict Business Relationship Process: The group has a strict process for establishing new or monitoring existing business relationships.
  • Systematic Transaction Monitoring: Transactions are monitored systematically and risk-orientedly to prevent illicit activities.
  • Restrictions on Cross-Border Activities: Cross-border activities are restricted to strategically and economically significant markets.

Rules of Conduct

  • Compliance with Laws and Regulations: Employees and corporate bodies are expected to comply with applicable laws, regulations, guidelines, professional standards, and the group’s rules of conduct.
  • Regulated Transactions: These rules regulate transactions in financial instruments, employee transactions, business relations, acceptance of inducements, and secondary employment.

Cyber Risks

  • High Priority Protection: Protection against cyber attacks is a high priority for the group.
  • Robust IT Systems: IT systems and trained employees ensure robust processes and advanced systems to protect data.
  • Advanced Threat Analysis: Specialists analyze new cyber threats and take defensive measures as needed.

Internal Control System (ICS)

  • Risk Transparency: The ICS contributes to increasing risk transparency by monitoring risks in business processes through effective control processes.
  • Industry-Standards-Based Standards: Standards customary in the banking industry are applied.

Business Continuity Management (BCM)

  • Crisis Management: BCM is used when preventative measures do not work, and an event threatens the existence of the company.
  • Critical Decision-Making: Critical business decisions are made using BCM crisis teams, emergency plans, and regular reports to senior management.