A. General

1. Role of management

Check points		Specific sample questions
a. Clarity of market operation policy	Does the bank have in place a clear policy concerning the management importance of, the purpose of, and the types of market transactions? Is the policy clearly defined in writing and reviewed periodically?	Are the purpose and type of market operation (e.g., hedging, speculation, customer transaction) and the importance to management clearly defined in the bank's annual policy, business plan, and/or internal rules? Is market operation policy regularly (e.g., semiannually) reviewed by management and at board meetings? Is business performance taken into consideration when reviewing policy?
b. Risk management (including ALM)	Is the management fully aware of the risks inherent in market transactions and asset/liability structure, and actively involved in establishing risk management policy and procedures which are consistent with business plans and other policies?	Does the management understand the risks below and is the management actually involved in the managing process? Interest rate risk inherent in asset/liability structure Various risks accompanying market transactions (market risk, credit risk, liquidity risk, etc.) Risks inherent in derivatives transactions including risks unique to options Does the management understand that risk-taking activities should be backed by the bank's financial strength such as profitability and capital? Does the bank have in place a system which controls the amount of risks to a reasonable level taking into consideration its capital, resource allocation, and business plan? Is the management aware of total risk exposure for the entire bank? Is the management aware of risk exposure in relation to the profit/loss of each business area? Is the management aware of the characteristics of risk measurement model and various business indicators?
c. Recognition of settlement risk inherent in foreign exchange (forex) transactions	Does the bank recognize the de facto credit exposure stemming from the lag in settlement time between different currencies? Does the bank have an appropriate policy for managing such settlement risks?	Is the management aware of settlement risk inherent in foreign exchange transactions? As is the case with credit administration in general, does the bank manage foreign exchange transactions by setting limits on daily settlement exposure (amount receivable) according to each counterparty? Does the management try to reduce settlement risk accompanying foreign exchange transactions by improving operating procedures and agreements with counterparties?

2. Risk management system

Check points			Specific sample questions
a. Establishment of internal rules	Are there written internal rules concerning organization, risk control procedures, double-checking, reporting system, authorization, responsibility, and chains of command? Are they reviewed periodically?		Does the bank have written internal rules with respect to the risk management system? Is the risk management system reviewed regularly (e.g., semiannually) or when necessary? Is review of the risk management system conducted under the authority of executive directors, directors, or department heads? Does the bank have in place measures to be taken in the event of an emergency (e.g., a list of contact persons/telephone numbers, delegation of authority)?
b. Separation of responsibilities and double-checking system	Does the bank have in place a double-checking system for front and back offices by enforcing separation of duties particularly between the front office which executes transactions and the back office which is in charge of the related processing, and by introducing an independent middle office (department/person in charge of risk management)?		Are front and back offices clearly segregated? Is the back office able to reconcile details of transactions with the front office in a timely manner? Is the bank able to reconcile details of transactions with its counterparty in a timely manner? Does the bank prevent conspiracy by sections involved in double-checking relationships through personnel management measures? Does the middle office monitor the operations of the front and back offices, and possess experience and knowledge equal to that of the front office? Is the concurrent holding of administrative posts in front and back offices and sections engaged in monitoring risk and custody prohibited? Do the middle and back offices obtain required data on risk management such as valuation rates directly without going through the front office?
c. Frequent and adequate reporting	Do the front, middle, and back offices make frequent and timely reports to the management and department heads regarding transactions, risk-taking volume, and the profit/loss situation?		Does the front office report transactions to department heads at the time of trade or within the day? Do the middle and back offices promptly submit daily reports directly to concerned department heads and directors, and weekly/monthly reports directly to the board members? Do reports include realized and unrealized profit/loss, risk exposure, and sensitivity in comparison with position limits, and, when necessary, profit/loss estimates and loss limits? Do the middle and back offices clear distinguish between the preliminary reports of front offices and the more concrete reports of middle and back offices, and are the contents and consistency of the reports regularly examined? Are reports for management easily comprehensible? Are reports for management utilized in business decision-making?
d. Internal controls and audit system	Does the bank implement appropriate business operations and risk management, and prevent crimes and accidents through daily internal controls and regular internal audits?	(1) Internal controls	Is overtime work appropriately managed from the standpoint of preventing financial irregularities? Are front and back office staff encouraged to take consecutive days off? Is consideration given to staff rotation so that one person is not in charge of the same responsibilities for an extensive period in order to avoid financial irregularities? Are expatriates and local staff at overseas branches managed by executives under the same strict standards as at the head office? Are telephone conversations of traders recorded and filed by a section other than the front office? Is entry/exit with respect to the dealing room and back offices controlled? Is access to mail boxes and facsimile machines by unauthorized staff restricted and controlled?
		(2) Internal and external audits	Are internal and external audits of front, middle, and back offices related to market operations and ALM conducted regularly? Do at least some audit department staff have sufficient knowledge and experience of market operations? Are there manuals for auditing market operations? Is there an audit section in overseas branches or are audit teams regularly dispatched (e.g., once a year for major branches) to audit departments related to market operations? Do the auditors examine the appropriateness of risk control procedures and adequacy of risk management models?

3. Market practices and transactions

Check points		Specific sample questions
a. Market practices and handling of new products	Does the bank enhance and strengthen risk management through appropriate market business practices which conform to the existing rules and systems, and through preliminary investigation of new products and new business operations?	Do the staff in charge and in administrative positions fully understand the characteristics of, and risks inherent in, products handled? Does the bank have the know-how for hedging and liquidating positions, and related accounting treatment? Does the bank recognize risks inherent in new products and new business operations and decide on procedures for and departments in charge of risk management and hedging for these products/operations prior to their introduction? Does the bank prepare appropriate planning and other documents for approval after thorough deliberation with relevant departments when launching new products and services? Does the bank enter into master agreements when necessary? Is it possible for the staff in charge to propose terms and conditions for products they are handling?
b. Sound transactions	Does the bank ensure soundness of transactions by eliminating profit manipulation and excessive risk-taking disproportionate to risk control ability and the bank's capital and earnings?	Is there any profit-taking or carrying forward of losses stemming from the manipulation of transactions or redemption, changes in accounting methods of market-traded products, and sales of options-related products? Is there any manipulation of accounts (trading and banking accounts)? Is there any covering up of losses by staff in charge and in administrative positions? Are there any positions with risks disproportionate to risk management capability and the bank's financial strength?

4. Establishment of other frameworks

Check points		Specific sample questions
a. Deployment of specialists	Is there an appropriate training program, and are there sufficient personnel with expertise in areas such as dealing, risk management, and operations?	Does each department have staff with expertise, and are they able to receive backup support from other staff with similar expertise? Is training taken into consideration when implementing staff rotation? Does the bank have in place manuals and an in-house training system (including programs for branch staff)? Are there supervisors in each department who understand the business operations and inherent risks?
b. Systems	Has the bank introduced and improved automated systems such as portfolio management, trading support, account processing, risk management, and settlement-related systems appropriate to transaction frequency and the business profile?	Does the bank have in place systems for portfolio management and accounting processing (including personal computers [PCs])? Are computerized trading support systems in place? Are there support systems for gathering information necessary for risk management? Does the bank have in place systems for the settlement of funds and securities? Are account processing systems linked with trading support systems? Are systems at domestic and overseas branches linked and monitored by the head office?
c. Information -gathering and analysis	Does the bank regularly gather and analyze information via outside sources and research institutions, and make use of the information in its risk management and business operations?	Does the bank maintain daily contact with outside information sources? Has the bank introduced information terminals? Does the bank hold regular department meetings (e.g., weekly) to discuss information analysis and investment strategies? Are there experts in charge of information analysis?

B. Trading (Not Limited to Transactions on the Specified Transaction Account)

1. Management system

Check points		Specific sample questions
a. Risk management for trading	Does the bank have a risk management system for trading that aims to monitor risks on a real-time, consolidated, and global basis?	Does the bank manage transactions for trading purposes separately from other market transactions? For on- and off-balance sheet transactions, are transaction information, profit/loss, and volume of risk managed on a consolidated basis? In principle, is risk management in the front office conducted on a real-time basis or on-demand basis? Do banks having specified transaction accounts clearly separate accounting, organization, and system? Does the bank manage internal contracts between the trading account and other accounts with due strictness to avoid arbitrary choice in bookings? Is the risk monitoring section capable of monitoring risk management information at all times? Does the bank promote risk management on a global and consolidated basis?
b. Customer business	In order to prevent problems with customers, has the bank established business principles for customer relations, and does the bank provide sufficient explanation to customers when carrying out transactions?	When effecting sales and transactions, does the bank provide sufficient explanation to customers regarding the characteristics of products, risk profiles, and terms and conditions of contracts? Does the bank gather management know-how and establish pricing models before engaging in business with customers? What is the incidence of customer complaints? Are important items to be considered during sales promotion clearly defined and well understood throughout the bank? Is due consideration given to customer profile when effecting sales and transactions? Does the bank disclose risk management information regarding transactions with customers (e.g., market price fdinformation) when necessary?
c. Performance management	Are excessive efforts to maintain and expand trading volume, market share, and profits putting unreasonable pressure on trading and sales sections, and consequently obstructing normal business operations?	Are targeted transaction volume and profit estimation set for individual traders, salespersons, and departments as a whole consistent in view of their abilities? Are profits/losses evaluated on a mark-to-market basis? Is business performance evaluated not only according to profits but also in comparison with degree of risk undertaken?

2. Market risk management

Check points		Specific sample questions
a. Assessment of market price and volume of risk	Does the bank assess the market risk exposure and valuation profit/loss on a mark-to-market basis?	Are products that cannot be marked to market (in comparison with the market price or computed price set by the bank's model) eliminated from trading portfolios? Are positions and profits/losses regularly assessed every business day (e.g., at the closing of domestic markets)? Are positions assessed on a real-time basis and profits/losses on either a real-time or an on-demand basis for actively traded products? Is the objectivity of the fair price used for marking to market secured through compilation of manuals and reliable processing? Is market risk exposure inherent in positions (e.g., Value at Risk [VaR], delta) assessed daily and quantitatively? Does the bank globally utilize a uniform risk measurement method? Does the bank review its risk measurement and mark-to-market models and implement stress tests and back-testing regularly (including consignment to auditing or consulting firms)? Does the bank utilize results from risk measurement and regular stress tests in making decisions on business operations and position limits?
b. Setting of the position limits and stop-loss rules	Does the bank set the position limits and stop-loss rules, and manage them properly?	Are aggregate position and stop-loss limits decided at board meetings? Does the chief trader frequently monitor each trader's positions during the day? Are positions and turnover reported to department heads at a certain time each business day (e.g., right after the close of morning and afternoon sessions)? Are position and stop-loss limits set according to trading skills and profit targets in accordance with the bank's capital? Does the bank use VaR, delta, gap, and notional amount jointly or separately depending on the purpose?
c. Risk management according to product features	Does the bank adopt risk management methods appropriate to characteristics of individual products, the bank's trading skills, and transaction methods?	Are position limits set by spot/forward rates, each currency, and net/gross volume when considered necessary from the standpoint of product features and trading methods? Does the bank use daily maturity ladders to manage the maturities of spots, forwards, and forward-start derivatives transactions? Is the treatment of after-hours dealing in bonds and foreign exchange clearly defined? Are overall positions, including after-hours dealings, reported to department heads the next day? Are the scales for stop-loss rules selected appropriately (price range, volume of marked-to-market losses, proportion of marked-to-market losses against contract/principal amount, and aggregate value of marked-to-market and realized losses)? Are the different setting methods of stop-loss rules (such as alarm and position close) used properly according to product characteristics and trading skills?
d. Awareness of market liquidity	Does the bank decide its trading position taking into account the market size and liquidity under normal conditions?	Are position limits set reasonably according to market size and product liquidity, taking position closing into account? Does the bank have in place a position management method (e.g., gross position limits by product and issuer) for arbitrage that takes into consideration market liquidity? Does the bank implement market risk management (e.g., setting limits on unsettled amounts and notional amounts) taking into account market liquidity by product and issuer?

3. Management of credit risk accompanying market transactions

Check points		Specific sample questions
a. Recognition of credit risk exposure	Does the bank recognize and understand the level of counterparty credit risk exposure accompanying over-the-counter transactions?	Does the bank understand the fact that credit risk exposure accompanies market transactions? Does the bank monitor credit risk exposure using trading volume (e.g., notional principal amount), or does it apply conversion factors (according to the nature of the instrument and its maturity) to trading volume? Does the bank monitor credit risk exposure using replacement cost or replacement cost plus potential exposure? Is replacement cost calculated using objective current market rates? Is the frequency of monitoring of credit risk exposure sufficient (e.g., daily)? Does the risk monitoring section regularly check the results of credit risk exposure calculation and ensure its objectivity?
b. Counterparty credit risk control	Does the credit management section conduct adequate risk management by setting credit limits to prevent excessive credit risk exposure?	Is the approval of credit extension through market transactions decided by an independent credit administration section? Are credit extensions screened and approved on a case-by-case basis for customers effecting few transactions, and are credit limits set by individual companies in advance for those customers effecting frequent transactions? Does the bank's credit administration combine credit risk exposure accompanying market transaction with loan volume? Aside from the regular review of credit limits, does the bank review credit limits each time something affecting credibility is revealed? Does the front support system include (1) the provision of data regarding percentage of credit limit already utilized and (2) automatic rejection of any requests that would be in excess of the agreed credit limit? Is credit risk exposure reduced by utilizing netting contracts and collateral agreements?

C. Securities Investment (Non-Trading Account)

1. Risk management system

Check points		Specific sample questions
a. Clear definition of investment policy	Does the bank clearly define an investment policy and plan, and adhere to them?	Has the bank compiled an investment policy clearly defining purpose of investment, authority of approval, and investment plan and limit? Has the bank drawn up an investment plan for the term as part of its business plan? Are the market operation and lending departments clearly separated to prevent insider trading? Has the bank compiled appropriate investment criteria by type of securities and investment purpose such as securities investment and purchasing of shares in client companies? Is the concerned investment policy compatible with other bank policies related to market operations?
b. Analysis and reporting of investment portfolio	Does the bank analyze its investment portfolio, etc., in detail, and report it to the management periodically?	Does the bank monitor its overall investment portfolio daily through ledgers and/or support systems? Does the bank regularly (e.g., monthly) analyze its investment portfolio, and report its findings, along with the profit/loss situation and progress of its investment plan, to management? Does the bank monitor and analyze its investment portfolio by detailed classification such as issuer, duration, currency, and investment purpose?
c. Assessment of investment performance	Does the bank structure its portfolio in such a way that it can sustain steady investment performance on a medium- and long-term basis? Does the bank confirm its performance by regularly revaluing its portfolio at market value?	Does the bank periodically revalue its investment portfolio at market value (e.g., monthly, excluding unlisted shares)? Does the bank regularly (e.g., semiannually) assess its investment performance giving consideration to fund-raising cost, profits/losses for each fiscal period, and marked-to-market profits/losses? Is the profitability of an entire transaction closely examined when the bank purchases shares in client companies? Are unlisted shares regularly (e.g., semiannually) revalued at market price and written off according to net asset price?

2. Market risk management

Check points		Specific sample questions
a. Setting of position limits	Are there position limits, and are they observed? Are they reviewed periodically?	Has the bank set position limits for overall securities investment by product and person in charge, and are limits regularly reviewed (e.g., semiannually)? Are position limits set based on the profitability of products and the bank's financial strength such as capital, not the actual value of the existing portfolio?
b. Rules to prevent excessive losses	Are the rules to prevent excessive losses (i.e., stop-loss rules) defined in writing, and are they observed? Are they reviewed periodically?	Are market trends and the profit/loss situation regularly reported to management? Are emergency measures dealing with excessive losses and dramatic market fluctuations defined in writing? Are there stop-loss rules for products whose yen-denominated value tends to fluctuate widely and rapidly, such as securities of complex structure, pure investment stocks, and foreign currency-denominated securities purchased through the exchange of yen?
c. Measurement and control of risks	Does the bank regularly measure and control risks inherent in its bond portfolio in accordance with its business operation policy?	Does the bank monitor the risk indicators of its bond portfolio, such as duration? Does the bank appropriately adjust duration through the replacement of investment securities in line with interest rate prospects? Does the bank analyze and control interest rate risk as part of its ALM? Does the bank analyze risk from the standpoints of fluctuation of profits/losses in market value and movements in profits/losses in duration?

3.Credit risk management

Check points		Specific sample questions
a. Selection of securities	Does the bank set rules to select securities, diversify risks, and limit high-risk securities taking account of issuers' credit?	Does the bank set rules for selecting securities to prevent concentration on a specific issuer/country, and are the rules reviewed regularly (e.g., semiannually)? Does the bank draw up its investment policy for foreign securities based on its analysis of country risk? Does the bank set rules for holding shares in client companies taking into consideration the profitability of overall transactions? Does the bank hold high-risk securities, and if so, are they in accordance with its risk management capability and financial strength?

D. Fund Management (Both Yen and Foreign Currencies)

1. Risk management system

Check points			Specific sample questions
a. Consolidated management of liquidity risk	Does the bank have in place a system for recognizing and managing liquidity risk on a consolidated basis?		Does the bank have a section responsible for managing liquidity risk of home and foreign currencies at the head office/domestic branches? Is close cooperation maintained between departments making fund transfers during the course of daily business operations and the fund management department? Does the head office monitor the fund management of major overseas branches on a daily basis and conduct consolidated management of both domestic and overseas branches? Does the head office regularly (e.g., weekly) monitor the fund management of overseas subsidiaries and manage both bank and overseas subsidiaries on a consolidated basis when necessary?
b. Countermeasures against liquidity crisis	Does the bank have countermeasures against fund-raising problems and an outflow of funds caused by market turmoil and a decline in the bank's credibility?	(1) Organiza- tion	Has the bank clarified emergency reporting lines and authorities? Does the bank have a list of contact persons/telephone numbers and a manual to enable the gathering and analysis of information, decide the countermeasures to be taken, and issue prompt instructions to related departments in the event of a crisis? Does the bank have separate sets of countermeasures in manuals for both normal and emergency situations? Does the bank gather and analyze information affecting its fund-raising ability such as the bank's share price, credit rating, and reputation? Has the bank drawn up countermeasures in anticipation of various emergency scenarios?
		(2) Securing methods of fund- raising in the event of an emergency	When possible, does the bank arrange an emergency line with reliable banks? Does the bank hold liquid assets which can be swiftly collateralized, such as government bonds of major currency countries? Does the bank regularly monitor available fund-raising amounts and timing through sales of securities and repurchase agreements? Does the bank confirm the possibility of raising home and foreign currencies through spot and forward transactions and currency swaps? Does the bank have access to the central bank credit facilities, and put up the required collateral?

2. Liquidity risk management

Check points		Specific sample questions
a. Measurement of liquidity risk	Does the bank recognize and control required funds by means of a cash flow schedule and maturity ladder charts to ensure smooth fund-raising in the market?	Does the bank compile a cash flow schedule every day, and monitor cash position gaps for at least the next three business days? Does the bank regularly (e.g., weekly) compile a maturity ladder chart according to settlement date and monitor cash position gaps on a daily, weekly, and monthly basis? Does the bank monitor and manage cash position gaps by each currency without converting into the home currency or other major currencies (e.g., the U.S. dollar)? Does the bank control risks taking into consideration the expected amount of execution of loan-type off-balance sheet transactions (i.e., loan commitments), expected settlement value of market transactions and estimated amount of cancellation of large transactions? Is the bank able to monitor the cash position gaps of the entire group including overseas branches/subsidiaries at the end of each local business day?
b. Limits on cash position gaps	Does the bank understand its fund-raising capacity and control its cash position gaps by setting limits?	Does the bank conduct research on, and is it aware of, its fund-raising capacity by type of fund-raising method? Does the bank set and observe limits on cash position gaps for foreign currencies bearing in mind its fund-raising capacity? Does the bank review the limits on cash position gaps in line with changes in its fund-raising capacity (e.g., change in credit rating)? Does the bank set limits on cash position gaps by overseas branch/subsidiary and currency?
c. Considerations regarding business operations	Does the bank conduct daily operations bearing in mind the containment of liquidity risk while giving due consideration to its collateral capacity and credit risk when investing in securities?	Does the bank effect daily operations so that the required amount of funds to be raised for each business day does not greatly exceed the daily average fund-raising amount? Does the bank conduct daily operations to stabilize the fund-raising structure by adequately controlling the degree of dependency on funds from the money market such as overnight call money? Does the bank set credit ceilings on deposits and loans by counterparty in order to control credit risk? When holding new assets denominated in a foreign currency, does the bank give due consideration to its fund-raising capacity for that currency? Does the bank give due consideration to its collateral capacity when investing in securities?

E. ALM

1. Identification of interest rate risk

Check points		Specific sample questions
a. Comprehensive risk management	Does the bank manage risks comprehensively utilizing various methods based on its understanding of the risk of individual products?	Does the bank control current assets and liabilities? Does the bank apply consolidated risk management to both on- and off-balance sheet transactions? Does the bank effect comprehensive risk management utilizing various analytical methodologies (e.g., gap analysis together with simulation analysis)? Does the bank analyze and control interest rate risk from the standpoint of changes in both periodic profits/losses and marked-to-market profits/losses?
b. Quantitative measurement of risks	Does the bank measure and analyze the level of risks using appropriate methods and make use of the results in management decisions?	Does the bank regularly (e.g., quarterly) compile maturity ladder charts according to rollover date and maturity? Are maturity ladder charts detailed, taking into account various factors such as nonperforming assets, shareholders' equity and provisions, and interest rate sensitivity? Does the bank regularly conduct simulation analysis and measure interest rate sensitivity? Does the bank have in place a risk measurement model (e.g., Value/Earnings at Risk model)? Does the bank conduct stress tests and make use of the results in policy decisions regarding risk-taking and risk-control?
c. Establishment of ALM system	Does the bank have in place a system for gathering and analyzing necessary data for measuring risks and utilize it fully by understanding its features?	Does the bank gather and analyze data utilizing PCs and spreadsheets? Do the managers and staff in charge clearly comprehend the preconditions for the calculation logic of the system? Does the system cover the major sources of interest rate risk such as differences in repricing date and degree of sensitivity of interest rates, and cancellation options? Does the bank have a support system for comprehensive analysis? Has the bank introduced an integrated ALM system for the entire bank that directly feeds data from the accounting systems?

2. Operation of ALM system

Check points		Specific sample questions
a. Effective organizational structure	Does the bank have in place an organization for deliberating on and implementing ALM (the ALM committee) and a department/person in charge of measuring, monitoring, and reporting interest rate risks, and do they function effectively with related departments within the bank?	Has the bank set up an ALM committee as one of the organizations that discuss important management issues? Does the ALM committee function as an organization involved in policy making? Does the ALM committee also discuss the overall management of assets and liabilities? Is there close cooperation between the ALM committee and related departments? Is the department/person in charge of measuring, monitoring, and reporting interest rate risks independent from the front office of market operations and business promotion sections? Are the responsibilities of related departments clearly defined concerning interest rate prospects, risk measurement, and the implementation of hedging transactions?
b. Frequency of meetings and reports	Is the frequency of ALM committee meetings appropriate? Does the top management receive reports of topics discussed and conclusions drawn?	Are ALM committee meetings held regularly (e.g., monthly)? Does top management receive reports on topics discussed and conclusions made at ALM committee meetings such as interest rate prospects, and risk-taking/hedging policy? Does the department/person in charge of interest rate risk management regularly monitor risks (e.g., weekly) and report directly to the executive directors and department heads? Are reports sufficiently clear to enable management to easily understand risk-taking volume in comparison with the bank's financial strength (i.e., profitability and capital)?
c. Commitment by management	Does the management take part in the ALM process and play an important role in it?	Does the management fully understand the substance of the ALM committee's business? Do directors concerned attend ALM committee meetings each time, and when necessary, does top management participate? Does the management actively take part in the discussions and decisions of ALM committee meetings?

3. ALM operations

Check points		Specific sample questions
a. Adjustment of risks	Does the bank take risk reduction measures when the quantitatively measured risks are excessive in comparison with the bank's capital and earnings?	Is the bank knowledgeable about hedging methods and capable of executing hedging transactions when necessary? Is such sales promotion policy as reference rate quotations for customers, spread guidelines, and volume targets compatible with ALM operation policy? Are interest rate risks hedged adequately and promptly through derivatives transactions and other market operations according to the ALM committee's operating policy? Does the bank set limits and guidelines on gaps and the amount of interest rate risks, with full awareness of its overall risk-taking limits in relation to its capital? Does the bank adjust the gap structure of on- and off-balance sheet items through derivatives transactions, changes in bond portfolio, and adjustments in the maturity and volume of deposits and loans?
b. Collective management of interest rate risk	Does the head office collectively control interest rate risk by adjusting interoffice rates, planning hedging policies, and executing hedging transactions?	Is the bank aware of the necessity of collective management of interest rate risk? Does the department/person in charge of interest rate risk management consistently undertake the responsibility of measuring, monitoring, and reporting of institution-wide interest rate risks? Does the head office separate deposit/lending rates into interoffice rate and spread (deposit/lending rate to customers = interoffice rate + spread) and collectively control interest rate risk as reflected in interoffice rate development?
c. Planning of business strategy	Are the results from ALM committee meetings reflected in business strategy decision-making?	Does the bank monitor the execution of decisions made by the ALM committee? Is the policy for controlling interest rate risk inherent in assets and liabilities clearly defined in business plans? Does the bank draw up business plans and medium-term management strategy including interest rate pricing policy for deposits and loans based on the results of ALM committee deliberations?