MEB’s risk appetite framework determines the amount risk the Bank is willing to take in pursuit of its business objectives. The framework addresses key risks, including (but not limited) to credit risk, liquidity risk, operational risk, market risk (including interest rate risk and foreign exchange rates risk) and reputational risk.
The risk appetite framework establishes key thresholds limits with respect to capital adequacy, liquidity adequacy and concentration limits. Through this framework, the Bank aims to reduce earnings volatility and ensure our excellent reputation; strong capital, funding and customer base remains intact throughout changing economic conditions.
The Board and Senior Management review and approve the Bank’s risk appetite framework on an annual basis. The Board is ultimately responsible for the monitoring overall implementation of the risk appetite at all levels of the bank.
MEB’s risk appetite also includes specific limits approved by the Board. We illustrate a subset of these limits in the table below:
For more information regarding MEB’s capital adequacy, credit risk, market risk and operational risk, refer to the Pillar 3 Regulatory Capital Disclosure. For details regarding the Bank’s liquidity risk, refer to the Pillar 3 Liquidity Coverage Ratio (LCR) Disclosure.