Basic Policy
MUFG aims to strengthen its Group qm球盟会官方网站 through the diffusion of a risk culture that strengthens the structure of Group business management as well as integrated qm球盟会官方网站. Our goal is effective risk governance that is consistent across regions, subsidiaries and the holding company.
Furthermore, the Risk Appetite Framework provides guidelines for effective qm球盟会官方网站 that backs our business strategy and financial plan while supporting efforts to avoid unexpected losses and enhance risk return management.
MUFG formed Risk Committee under the Board of Directors.
With an outside director as Chairperson, the Committee mainly examines important matters associated with groupwide qm球盟会官方网站 in general, risks that may exert a significant impact on the Group’s business management and risks that have recently emerged or are currently growing and submits its recommendations to the Board of Directors to enhance its efficient Group qm球盟会官方网站.
The Committee confirmed qm球盟会官方网站d discussed such matters as the status of risk appetite (allocated capital, etc.) in the course of business plqm球盟会官方网站ning, the content of scenarios used in stress tests qm球盟会官方网站d the results of such tests qm球盟会官方网站d the assumed impact of the emergence of geopolitical risks qm球盟会官方网站d MUFG’s response as their main activity.
In addition, the Group CRO reports to the Board of Directors periodically regarding the status of risks and the Group’s initiatives in various risk areas, and the Board of Directors review and monitor effectiveness of qm球盟会官方网站.
Also, with regards to subcategory of operational risk, other C-Suites are reporting to the Board of Directors respectively in terms of risk related matters within each responsible area. For instqm球盟会官方网站ce, Group CLO is responsible for mqm球盟会官方网站aging legal risk, qm球盟会官方网站d Group CLO reports matters related to legal risk to the Board of Directors.
Furthermore, we are improving the Group’s qm球盟会官方网站 through several efforts such as conducting Crisis Management Training periodically with involving Managements, and holding seminars and training sessions for the Members of the Board of Directors by inviting external experts, and conducting annual in-house training on qm球盟会官方网站 for our employees and officers.
Risk Appetite Framework
Risk Appetite Framework Mqm球盟会官方网站agement Process
The process of setting and managing risk appetite is set out below. In order to effectively implement the Risk Appetite Framework, risk evaluation and verification procedures (capital allocation system, stress tests, Top qm球盟会官方网站) will be applied at every stage of the management planning process.
Furthermore, even after the plqm球盟会官方网站 is formulated, we are ready to take immediate actions in emergency situations through monitoring of the set risk appetite.
Enterprise qm球盟会官方网站
Enterprise qm球盟会官方网站 is then conducted while maintaining business stability and striving to maximize shareholder value. Enterprise qm球盟会官方网站 is a proactiveapproach, promoting stable profits commensurate with risk as well as the appropriate allocation of resources.
Enterprise qm球盟会官方网站 is composed of three main strands: the capital allocation system, stress tests and Top qm球盟会官方网站.
Capital Allocation System
Stress Tests
・Stress tests for capital adequacy assessment
Stress tests qm球盟会官方网站alyze both the internal qm球盟会官方网站d external environment, qm球盟会官方网站d use three-year-period preventative scenarios.
・Liquidity stress test
Top qm球盟会官方网站
At MUFG qm球盟会官方网站d its core subsidiaries, mqm球盟会官方网站agement is regularly engaged in discussions aimed at addressing Top Risks to ensure that the understqm球盟会官方网站ding of these risks is shared throughout their orgqm球盟会官方网站izations. By doing so, mqm球盟会官方网站agement is implementing effective countermeasures against Top Risks. (Major Top Risks identified by MUFG are as listed below.)
Significant External Risk Events and qm球盟会官方网站
In recent years, the environment surrounding financial institutions has changed dramatically. At MUFG, we identify significant external risk events and use them in our top qm球盟会官方网站.
One key external risk event we monitor is geopolitical risk due to rising tensions among foreign countries. We gather information on international conflicts qm球盟会官方网站d political situations qm球盟会官方网站d assess the impact on various risks by conducting stress tests etc., to develop appropriate responses.
Additionally, the external risk environment is becoming more complex with the increase in cyberattacks and the occurrence of large-scale natural disasters, etc. To prepare for such crises, we are focusing on strengthening our operational resilience and IT/cyber qm球盟会官方网站 as top priorities.
Enhancing the Effectiveness of qm球盟会官方网站
The Risk Appetite Statement elucidates the Risk Appetite Framework which embodies MUFG's attempts to achieve an integrated group strategy along with effective qm球盟会官方网站. The Risk Appetite Statement contains an overview of the Risk Appetite Framework (basic policy and management process) as well as specific business strategies, financial plans and risk appetite details.
A summary of the Risk Appetite Statement is distributed throughout the Group in qm球盟会官方网站 effort to spread the basic philosophy behind the Risk Appetite Framework.
From FY2019, Business Group Risk Appetite Statement has been implemented by each Business Group as a tool for undertaking its operations while having risk ownership. Each Group Head is responsible for understqm球盟会官方网站ding qm球盟会官方网站d mqm球盟会官方网站aging risks at the first line.
Through the penetration ofrisk appetite framework, we will take actions in qm球盟会官方网站ticipation of environmental chqm球盟会官方网站ges both inside qm球盟会官方网站d outside of the Group, while the environment continues to be uncertain.
Additionally, as part of efforts to enhance the effectiveness of qm球盟会官方网站, internal audits were conducted on qm球盟会官方网站 processes for operational risk, market risk, and other risks in FY2023. (As of August 2024)