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Home > About US > Corporate Governance > Risk Management > Integrated Risk Management

Integrated Risk Management


Integrated risk management is a method to quantify various risks with unified methodology and to manage the total amount of risks within the realm of management vitality.

For credit risks and market risks, after allocating risk capital to each risk operation department by risk category within the realm of our own capital, we quantify risks with the methodology of Value at Risk (VaR) and manage the calculated volume of risks within the range of that allocated risk capital.

Operational risks, which consists of processing risks and system risks, is measured by basic method and we allocate risk capital amounts on it.

Allocated amounts of risk capital are determined as final at the Management Committee, with prior deliberation at an annual regular "Risk Management Comittee".

Each risk operation department controls the risks within the realm of the allocated risk capital. Risk Management Department, which is independent of risk operation departments, quantifies the risks, monitors risk operation conditions, and reports to board members.

In case a possible rise for a risk may exceed the allocated amount of the risk capital, an extraordinary "Risk Management Committee" will be held to deliberate responses to the case and then consult the Management Committee.

Risk Capital

Risk capital is capital necessary to cover losses caused by risks generated from business operation.

Value at Risk (VaR)

VaR is the maximum expected loss on an asset calculated with a certain period (holding period) and a certain probability (confidence level). This is calculated based on data in the past with statistical method. In our company, VaR is calculated based on confidence level of 99% and holding period of 1 year from 10 days.

Risk Management Committee

This is a committee to deliberate issues such as allocated amount of risk capital and so forth. The committee is organized by the managers of Corporate Planning Department, Risk Management Department, Business Development Department and all the other business departments concerned.

Management Committee

This is a committee to deliberate important matters concerning business execution. The committee is organized by the executive officers.