Danièle Nouy addressed participants at International Conference in Ljubljana
International Conference on Risk Appetite Framework in Banks is taking place in Ljubljana today. Objective of the conference is to explore and discuss current achievements and further developments of the Risk Appetite Frameworks (RAF) in the Slovenian and also wider European context. In the opening part Danièle Nouy, Chair of the Supervisory Committee of the Single Monitoring Mechanism (SSM) at the European Central Bank addressed the participants. She stressed that banks must know how much risk they can stomach and set their appetite for risk accordingly. "Naturally, this takes more than guesswork: it requires comprehensive and well-developed risk appetite frameworks. These frameworks are a core element of risk culture and risk management. Banks must take them seriously and build them with great care. With regard to Slovenia, we expect banks to focus on at least four things. First, they should concentrate on credit underwriting criteria. Second, banks should work on how they identify potential deterioration of credit risks; they must carefully monitor weak credits so they can take steps to keep the loans performing. Third, banks should ensure the proper management of collateral. Fourth, they should pinpoint concentration risks in their risk appetite statements," she emphasized.
The conference is jointly organized by the Bank of Slovenia, the European Commission and the European Bank for Reconstruction and Development (EBRD).