Risk management and compliance

Risk management is an integral component of corporate culture at the EIF.

The Risk Management function at the EIF plays a vital role in achieving the organisation’s mission by balancing policy goals with the dual objective of self-sustainability and maintaining the highest possible external credit ratings. Through a robust and solid risk management framework, the EIF ensures its long-term financial stability and credibility with major external credit rating agencies, enabling it to effectively support its policy-driven initiatives. 

In essence, the risk management function is a strategic and proactive process aimed at identifying, assessing, and mitigating potential risks that could impact the EIF's operations.

We are applying a structured approach to our risk management.

The EIF has an internal Risk Management Framework that covers financial and non-financial risks. To ensure effective risk management and maintain adequate capitalisation and a liquidity, the EIF Risk Office has defined specific key risk indicators, within the context of the Risk Appetite Framework (RAF) that are monitored on a regular basis.

The risk framework also includes the ICAAP, ILAAP and a standalone capital plan. These elements contribute to the EIB Group’s consolidated risk management approach, including the Group ICAAP and ILAAP, the Group Risk Appetite Framework and the Group Capital Plan under the leadership of the Group Chief Risk Officer.

Sound risk assessment and financial resilience go hand-in-hand.

The EIF Risk Office has a complete range of processes and procedures in place that allow for a sound risk assessment of its operations and mandates as well as the surveillance and monitoring of its portfolio and individual mandates, providing analysis on a regular basis to the relevant committees, governing bodies and senior management. 

In addition, a solid capital and liquidity management framework ensures the institution’s capital and liquidity sustainability in line with EIB Group policies.

Our enhanced reporting standards follow best practices in this field.

The EIF risk reporting framework provides regular reporting to top management on current and future risks, incorporating a forward-looking perspective with clear risk appetite limits, allowing for informed decision making in a timely manner.

In the area of environmental and social sustainability, Risk Management has developed a framework which is implemented in its operations and includes visibility of the impact of investments, contributing to the Group SDG report.

Finally, the EIF Risk Office continues to enhance the EIF Risk Appetite Framework and Risk Appetite Statement by implementing methodological enhancements on a regular basis, increasing the consistency with the EIB Group, and as necessary, in adherence with best banking and market practices.

The remit of Compliance & Operational Risk (COR) includes the assessment of compliance risk and operational risk within EIF. The Head of COR is also responsible for data protection within EIF.

Compliance

The role of COR, includes the assessment of compliance risk for EIF as an institution, the production of an independent compliance opinion covering e.g. anti-money laundering, 'know your customer' and tax transparency issues for each transaction submitted to the EIF Board of Directors, the monitoring of the investment policies and restrictions for each mandate, and the assessment of professional conduct issues.

As part of its remit to assess public procurement matters, COR is actively involved in the concept and implementation of various calls for expression of interest, ensuring a fair and consistent approach. Finally, COR strengthens the awareness of EIF Staff on compliance-related matters through the organisation of an increased number of training sessions.

Anti-money laundering and combatting the financing of terrorism

The European Investment Bank Group places great emphasis on integrity and good governance, and is committed to the highest standards of anti-money laundering (AML) and of combating the financing of terrorism (CFT).

Adherence to the EIB Group AML-CFT Framework aims at preventing the EIB Group from being exposed to reputational damage and financial loss in relation to non-compliance with applicable AML-CFT standards.

On 17 January 2018, the Management Committee of the European Investment Bank (EIB) approved the revised EIB Group AML-CFT Framework. It is published on the EIB website.

Operational risk

A methodology has been developed for the implementation of a comprehensive and integrated operational risk management framework to support the identification, assessment, monitoring and mitigation of operational risk within the organisation.

Data protection

The EIF strives to implement the highest data protection standards in compliance with the Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on the protection of natural persons with regard to the processing of personal data by the Union institutions, bodies, offices and agencies and on the free movement of such data. For this purpose, the EIF has appointed a Data Protection Officer who can be contacted here for any inquiry about EIF Data Protection.