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Report BFA - Bankia 2015 / Risk managementCorporate governance is key

One of the most significant aspects of the European banking supervision system is the introduction of corporate governance as a key element in risk management. Under the new regulations, banks must establish sound corporate governance procedures; effective systems of risk identification, management, control and reporting; appropriate internal control mechanisms; and remuneration policies and practices that are compatible with appropriate and effective risk management.

BFA-Bankia fully adheres to the spirit of the new regulation. In 2014 it developed a clear organisational structure to ensure effective functioning of risk supervision and control; and in 2015 it reinforced the role and status of the Executive Director of Risk Management, whose expertise and independence of judgment are fundamental to the proper performance of the system of responsibilities.


The structure of the governing bodies is as follows:



The Board of Directors is the highest governing body. It determines and approves the overall internal control strategies and procedures and the policies for the approval, management, control and reduction of risk. Reporting to the Board are various committees with authority over risk control and risk monitoring.


One of the basic responsibilities of this committee is to supervise the effectiveness of the bank’s internal control, internal audit and, where appropriate, risk management systems.


The main function of this committee is to advise the Board of Directors on the bank’s overall risk propensity, both current and future, and its risk strategy. Other functions of the Risk Advisory Committee are to oversee the pricing policy, assist in preparing a rational remuneration policy and periodically monitor the loan portfolio.


The Board Risk Committee is the executive body responsible for approving risks within the scope of its authority and for overseeing and administering the exercise of delegated authority by lowerranking bodies, without prejudice to the oversight authority vested by law in the Audit and Compliance Committee.