Investor Presentaiton
MORGAN STANLEY BANK ASIA LIMITED
UNAUDITED SUPPLEMENTARY FINANCIAL INFORMATION
Year ended 31 December 2020
H. PILLAR 3 DISCLOSURE (CONTINUED)
Table OVA: Overview of risk management (continued)
Risk Appetite Monitoring and Reporting
The Company's Risk Appetite Framework requires a comprehensive approach to monitor, assess and
report on the risk profiles of the Company, Business Units on an ongoing basis, with regular reporting to
the Bank Risk Committee and Board Risk Committee. The reporting must include quantitative
measurements and qualitative assessments that enable a comparison of the Company's current risk profile
against risk limits, KRIS and Risk Tolerance Statements. Reporting must identify matters for escalation
and decisions, as well as highlight emerging risks, mitigating actions and matters that are significant to
the Company's strategy.
Monitoring is an ongoing review of major risks and/or controls at a set frequency. The scope and
frequency of monitoring depends on the types of risk, as well as on the specific business risk operations
and activities. Adequate monitoring enables the Company to understand its risk profile across risk types,
groups, and lines of business. It also helps the Company to ascertain how particular risks may be evolving
or changing in reaction to controls and the impact of emerging risks.
Risk data and analysis are reported at and across multiple levels of the Company, and to various audiences,
through an extensive suite of periodic and ad hoc reports. Reports include backward-looking, current,
and forward-looking risk management information. The goal of effective risk reporting is to provide
actionable information that informs daily business decisions, prompts responses to key current and
emerging issues, and ensures that senior management and the Board maintain a comprehensive view of
key risk profiles.
Firm Risk Management Functions
Market Risk
The Market Risk Department ("MRD") oversees the market risk arising from the Company's
trading and non-trading business activities. This includes identifying and defining market risks;
developing and employing risk measures and tools to monitor, control and mitigate those risks;
establishing limits; monitoring usage against these limits; and producing and distributing
comprehensive reports designed to keep senior management apprised of the Company's market
risk exposures. MRD helps ensure transparency of material market risks, which includes, but is
not limited to, the escalation of risk concentrations to senior management, as well as the
disclosure and reporting of market risks to the Board and the Company's regulatory authorities.
Credit Risk
The Credit Risk Management Department ("CRM”) oversees, assesses, monitors, measures,
controls and reports on credit risk exposure to institutions and individuals primarily through the
Wealth Management businesses ("PWM Asia"). CRM helps ensure transparency of material
credit risks, which includes the escalation of risk concentrations to senior management, as well
as the disclosure and reporting of credit risks to the Board and the Company's regulatory
authorities. CRM also works closely with MRD and applicable Business Units to monitor risk
exposures and to perform stress tests to identify, analyse and control credit risk concentrations
arising in PWM Asia's lending and trading activities.
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