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Resources and functions

The core principles of Société Générale's risk management are presented below. The Group's policy is set out in full in chapter 9 of the bank's 2009 registration document , which is available on the Group website: www.socgen.com.

Société Générale Group dedicates significant resources to constantly adapting its risk management to its increasingly varied activities and to ensuring that it is fully compliant with the guiding principles of France's banking regulations, namely:

That risk management departments should be entirely independent of all operating divisions
That a consistent approach to risk assessment and management must be applied throughout the Group

Moreover, any changes are systematically made in compliance with two key principles of banking risk management, laid down by regulations 1997-02, 2001-01 and 2004-02 of the French Banking and Financial Regulation Committee.
Société Générale Group’s risk functions employs 3,300 members of staff dedicated to risk management.

800 within the Group’s Risk Division
2,500 within the Group’s various divisions and subsidiaries

The Risk Division is independent from the Group’s operating entities and reports directly to the General Management.
Its role is to contribute to the development and profitability of the Group by ensuring that the risk management in place is effective. It employs various teams specializing in the operational management of credit and market risk, as well as risk modelling teams, IT project managers, expert sector analysts and economic research teams.

The Risk Division:

Defines and validates the methods used to analyze, assess, approve and monitor credit risks, country risks, market risks and operational risks
Conducts a critical review of commercial strategies in high-risk areas and continually seeks to improve on forecasting and management
Contributes to independent assessments by analysing those transactions that imply a credit risk and providing an opinion on credit transactions submitted by sales managers
Identifies all Group risks and monitors the adequacy and consistency of risk management IT systems

The Finance Division is entrusted with assessing and managing other major types of risk, namely strategic, business, liquidity and structural risks. Structural interest rate, exchange rate and liquidity risks as well as the Group’s long-term refinancing, working capital requirements and equity structure are managed by Capital, Balance Sheet and Regulations Department. In addition, the Internal Legal Committee deals with compliance and legal risks.

Responsibility for the Group's risk management structures and operating principles lies with the Risk Division and, in certain fields, with the Finance Division.

All new products and activities or products under development must be submitted to the New Products Committee of the relevant business line. This role of this Committee is to ensure that, prior to the launch of a new activity or product, all associated risks are fully understood, measured and approved, and that they have undergone the necessary procedures and controls by the appropriate information and processing systems. Group Sustainable Development department is a member of the New Product Committee and overlooks the environmental and social aspects.