Risk Management

Risk Management Organizational Structure

Fubon Financial Holdings has built a soundand independent risk managementorganizational structure. The Board of Directorsis responsible for overseeing theestablishment of sound risk managementsystems and controls, approving theCompany’s risk management policies, andreviewing important risk management reports.The Audit Committee assists the Board ofDirectors in monitoring the Company’s riskcontrols, corporate governance and internalsystems.

The Risk Management Committee under theChairman of the Board is responsible forreviewing overall risk management strategiesand risk limits, monitoring full spectrum ofcredit risk, market risk, operational risk,insurance risk, liquidity risk, etc. of theCompany and its subsidiaries.

Fubon subsidiaries have also established riskmanagement organizational structures andindependent risk management units to performrisk management functions.

Risk Management System

The Company has developed comprehensiverisk management policies, procedures andsystems on credit risk, market risk, operationalrisk, insurance risk, asset and liability risk, andliquidity risk. Subsidiaries act in full compliancewith these directives to identify measure,monitor and manage various types of risk.FubonFinancial Holdings continues toadvance its risk management in benchmarkwith international best practices to support thecompany’s sustainable operations and soliddevelopment.

Risk Management: Three Lines of Defense

Fubon Financial Holdings’ risk managementarchitecture adopts three lines of defensemodel to ensure the effectiveness of its riskmanagement mechanism.

  • First line of defense – All business, operationaland managing units are responsible forfollowing risk management procedures inperforming their respective duties.
  • Second line of defense– Independent riskmanagement units are responsible forplanning, and managing risk managementsystems, independently controlling andreporting risks.
  • Third line of defense – Independent audit unitsare responsible for auditing the compliancequality of internal control rules and riskdirectives.