Management bodies

Each business or support unit has one or more Internal Control and Operational Risk Committees (CIROCs) that meet on a quarterly basis. These committees analyze the information provided by the tools and take the appropriate mitigation decisions. The measures adopted are then monitored to check their effectiveness.

Above these CIROCs is the Country-level Committee for Internal Control and Operational Risk, which deals with more significant risks and their corresponding mitigation plans as well as risks that cut across different areas. The Global Internal Risk and Operational Risk Committee is the highest-level body in the parent company, which undertakes a general monitoring of the Group’s main operational risks.

The corporate tools outlined below help provide a standardized view of risk. Within a short space of time they have created a common language for the whole Organization.

Ev-Ro: Ev-Ro is a tool used to identify and prioritize operational risk factors. An analysis of the impact and frequency of each risk factor enables risk maps to be generated by business or support areas and class of risk.

Chart 43 shows the distribution by risk type and by type of loss.

TransVaR. All the Group’s operations are based on process management. TransVaR is a tool for key risk indicators (KRI) associated with processes. It identifies impairment or improvement in the Institution’s risk profile.

SIRO: Operational risk events nearly always have a negative impact on the Group’s income statement. To keep these events under control, they are recorded in a database called SIRO. To ensure reliability, inputs are fed directly from accounting. The internal SIRO data are supplemented with information from an external database at the Operational Risk Exchange (ORX) consortium (orx@org.com). ORX is a non-profit association of which BBVA is a founding partner. Currently its membership includes more than 50 leading banks in 18 countries.

Periodic monitoring is carried out on the historical distribution of losses by geographical area and class of risk. The accompanying charts show the results of this monitoring (Chart 44).

43: BBVA Group. Risk assessed with Ev-Ro


44: Historical distribution of losses by type of risk