Risk Management

Gagellan adds value to customers and generates returns for shareholders by taking and managing risk in line with strategy and within risk appetite. Risk management is the set of end-to-end activities through which we make risk-taking decisions and we control and optimise the risk-return profile of the bank. It is a bank-wide activity and starts right at the front-line.

Effective risk management is central part of our financial and operational management services for our clients and fundamental to our ability to generate profits consistently and maximise the interests of stakeholders.

Gagellan Advantage

Gagellan Risk Management Consulting Solutions for capital markets span the full range of participants including sell-side, buy-side and market infrastructure. Our solution accelerators for pricing models and risk frameworks help you with competitive differentiation and adopt more effective and efficient risk management practices.

What Services We Offer

Gagellan Risk Management Consulting Services help you prepare for, navigate and manage risks in today’s complex business environment. Our areas of expertise cover the major risk management areas such as credit, market liquidity and operational risk and specific areas such as collateral management and risk analytics. Some of our core solutions include niche customized services to investment banks and Trading Companies.

The Risk Management Principles comprise statements of intent that describe our approach to the management of risk and the clients risk culture

• Balancing risk and return.
• We take risk in line with the requirements of stakeholders.
• We take risk within our risk appetite, consistent with our approved strategy .
• We avoid taking risks which have a material probability of causing financial distress to the Group or its clients or customers.

Responsibility

• We take individual responsibility to ensure risk-taking is disciplined and focused, particularly within our area of authority.
• We take account of our social responsibilities and our commitments to customers in taking risk to produce a return.

Accountability

• We only take risk within agreed authorities and where there is appropriate infrastructure and resource.
• We make sure risk-taking is transparent, controlled and reported.

Anticipation

• We seek to anticipate material future risks and ensure awareness of all known risk.
• Competitive Advantage.
• We seek to achieve competitive advantage through efficient and effective risk management and control.

Gagellan Risk Management Consulting Solutions for capital markets span the full range of participants including sell-side, buy-side and market infrastructure. Our solution accelerators for pricing models and risk frameworks help you with competitive differentiation and adopt more effective and efficient risk management practices.

Gagellan Risk Management Consulting Services help you prepare for, navigate and manage risks in today’s complex business environment. Our areas of expertise cover the major risk management areas such as credit, market liquidity and operational risk and specific areas such as collateral management and risk analytics. Some of our core solutions include niche customized services to investment banks and Trading Companies.

For us Risk management is the set of end-to-end activities through which we control and optimise the risk-return profile of the Client. Our approach can be grouped into six inter-dependent risk management process categories.

Plan Set risk appetite in line with strategic objectives Inform Identify, measure and monitor all material risks Control Set parameters to keep our risk profile within risk appetite Originate Structure and book transactions Optimise Balance risk and return to best effect Communicate Influence, interpret and demonstrate compliance with external stakeholder requirements relating to risk management.

• PLAN:Set risk appetite in line with strategic objectives(within Approach only).

We recognise that having a clear and coherent strategy and the discipline to adhere to it is the most important foundation for the effective management of risk. We have a considered and deliberate process by which we decide how much risk we want to take on, where we want to assume that risk and how we will prepare for it.

Risk forms an integral part of our business planning. These activities are led by the responsible senior business consultants, and are informed and challenged by Risk and other specialists who make alternatives transparent for decision making.

In order to usefully inform business decisions, we try to clear about the severity and likelihood of different risk event triggers or causes. At one extreme, highly likely events must be factored into BAU planning and budgeting, even if they have relatively low severity. We assume they will occur and implement compensating controls, mitigants or pricing. At the other extreme, we anticipate those highly unlikely but plausible scenarios which may result in severe impacts in order to ensure that appropriate management action triggers are put in place and to ensure that the risk tolerance limits are not breached.

Monitoring risk exposures and underlying environmental conditions must be an ongoing activity, recognizing that they may be constantly changing.

Reporting of risk is how we ensure that management attention is brought to material risks and hence that the organization is effectively prepared to respond to risk events as they arise. Reporting is also critical in ensuring that proper disclosure and communication with key stakeholders are maintained.

The Risk Management Team (in respect of Liquidity and Capital risks) ultimately approve the standards by which risks are identified, measured and monitored. It is the responsibility of business originators and consultants to be properly informed of the risks they run, and to ensure these are properly identified and monitored.

Exposure Limits provide clear boundaries for financial risks. These apply in areas where we can reliably measure and monitor risk exposure, across a range of risk variables. To ensure we take account of material exposure concentrations wherever they might arise, limits may be set at a number of levels, such as an individual transaction, customer, portfolio, product/process, business line, geography and so on. At the top level, risk tolerance limits are set to align with Risk Appetite and the expressed or implied tolerance of key stakeholders.

We Classify risk exposures helps with risk identification Risk Types are the different ways that we may be exposed to loss. Each Risk Type is a grouping of potential losses which are material, and which may arise in different activities or areas of the Group. We use Risk Types principally as an aid to ensure comprehensive and consistent identification of risks, wherever they may arise.

There are a number of broad organizational factors which drive the efficiency and effectiveness of risk management processes. The principal risk management enablers are:

Risk Culture :

We remain conscious of the uncertainty of business outcomes and disciplined in our assessment and clients management of that uncertainty. We take responsibility for and collaborate in the identification and management of risk in the pursuit of stakeholder interest. We encourage risk taking within controlled boundaries where the expected rewards exceed the expected cost of that risk.

People & skills :

We value the skills and experience of our people as a major contributor to the effectiveness of our risk management processes and of our ability to respond effectively to adverse events. We expect our business managers to achieve defined standards in their understanding of risk and risk management processes, in line with their level of responsibility and seniority. We train and develop our people to ensure we have depth of knowledge and skills and are not overly reliant on a small number of experts.

Infrastructure :

We maintain our physical and systems infrastructure to ensure it is reliable and fit for purpose, recognizing that failures can have very serious consequences for our stakeholders. We ensure that our infrastructure and processes are sufficiently scalable to accommodate anticipated volatility and growth.

Information & data quality :

We recognize the importance of making available, timely, complete and accurate information that will underpin the quality of our risk management decision. We inform our decisions objectively and maintain high standards of consistency and quality for our business and reference data.