Risk Management

The financial markets offer a huge range of investments with varying potential returns and yields with a correspondingly large range of risk profiles that our customers need to be aware of in order to match them to their risk appetite.

In a market environment that tends to be more and more complex, the CMB professionals offer to the client  their expertise and “savoir-faire”, with the objective of helping them to make the most appropriate investment decisions.

The customers need to be aware that all potential financial gain is linked to the acceptance of a certain degree of risk. They therefore need to balance the potential gain by taking account of the risk and potential losses.

The risk appreciation of a financial instrument depends on several intrinsic factors which could impact its market value. According to its nature, the market value can be influenced by its liquidity, its exposure to the foreign exchange market, interest rates, and credit risk.

The Risk Management unit’s aim is to maintain a high quality of services for our customer’s benefits whilst following the current regulatory framework. It also aims to control all risks relating to Private Banking activities, especially the compliance of banking operations by the analysis of credit risk, the monitoring of operational processes, the security of information held and the fight against fraud.

The internal control system was established in order to respect the banking and financial regulatory of the Principality of Monaco (links below CCAF and ACPR), which has been revised recently with the decree of November 3rd 2014.

The service is structured under 3 levels of control, following the regulatory requirements. In the first level of control, the department heads are responsible for operational controls, occasionally supported by specialized units.

The second level of control involves the Permanent Control and Risk Management service, in charge of ensuring the monitoring of the risk mapping in all areas of our bank (credit risk, market risk, operational and IT risks). This level of control also involves the Compliance service that supervises the clients’ assets of the bank regarding the anti money laundering and terrorism financing as well as the compliance of market operations.
The third level of control involves the Inspection (Periodic Control) which is responsible for carrying out audit control on all banking activities.

Monaco has set up a specific regulatory framework for the prevention of money laundering, terrorism financing and corruption with the creation in 1993 of a local body, SICCFIN (Service d’Information et de Contrôle sur les circuits Financiers).

SICCFIN is responsible for: handling suspicious transaction reports, verifying the application of the Law and proper international cooperation in the area of prevention of money laundering, financing of terrorism and corruption.

The regulatory requirements were strengthened in 2009 through the enactment of Law no. 1.362 and Sovereign Order no 2.318 of 3 August 2009, which in particular introduced stricter KYC requirements and transaction supervision rules. In this respect, CMB has put in place an efficient system that complies with the regulatory requirements in this area.