Risk, liquidity and capital management

Risk involves uncertainty in various forms and is a natural element of all types of business. Carnegie’s ability to assess and manage risks while maintaining adequate capital strength and liquidity to manage unforeseen events is critical to the Group’s long-term profitability. The ultimate purpose is to ensure that risks are manage deffectively and that we have sufficient capital and liquidity inrelation to the risks we take.

Carnegie’s risk profile consists of both financial and non-financial risks. Financial risks, such as market and credit risks, are generally low and the Group sustained no losses of material size in 2016. Non-financial risks include operational risk, compliance risk and reputational risk. Carnegie works continuously to improve protection against these types of risk. Preparations for the implementation of MIFID II and IFRS9, among else, commenced in 2016. This will transition to an implementation phase in 2017 to ensure compliance when the new regulations take effect in January 2018. Carnegie has further developed its approach to sustainability management, where consideration is given to financial, environmental and social aspects. We have clear policies to promote sound business ethics and professionalism in all areas of operations. One aspect of this is to continuously manage these issues and monitor compliance with the Carnegie approach to risk management.

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