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Home|The bigger picture|Risk and compliance

Risk management and compliance

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

Our activity requires the development of market instruments that entail certain risks, and hence, a risk management mindset is a characteristic that guides all our business functions and processes.

The Risk Management and Monitoring (RMM) division is responsible for reviewing and facilitating the implementation of new processes and methodologies to manage the risk-return profile of the Fund’s existing and new investment activities.

In this context, the RMM division performs an independent analysis of each transaction and issues an opinion to the Investment and Risk Committee. It reviews credit ratings (portfolio guarantees) and expected performance gradings (private equity) assigned by the front office to these investments.

We are applying a structured approach to our risk management.

The RMM business area is also responsible for the monitoring of guarantee activities under the European Commission’s mandates. Moreover, RMM performs portfolio reviews for our private equity investments and guarantee products. 

This risk awareness and readiness, enabled us to rapidly respond to the financial crisis. At the level of single transactions, we stepped up monitoring efforts. At the portfolio level, we applied and communicated to our governing bodies more severe structured stress tests.

EIB Group Risk Management Charter

The EIB Group Risk Management Charter codifies the high level risk management principles applicable across the EIB Group requiring that risks are managed in an effective and consistent manner and in line with best banking principles and practices.

Compliance & Non-financial risk

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
  • 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.