Risk management entails both strategic and operational factors. Profitability, leverage, and risk are interdependent strategic factors: the determination of the monetary value and of the nature of the risk are the basis for developing the economic and financial structure of the group and its subsidiaries.
Operational risk management is related to the adoption of the coverage needed for respecting the established risk limits and the development of procedures aimed at reporting on the control activity.
The three main aspects of risk management are credit risk, market risk, and cash risk: each of these factors is analyzed and managed through the appropriate models and tools. We devote particular attention to tax issues and to compliance with transfer pricing regulations.
In particular, our "Risk Management" team assists clients in the following activities:
Integral systems aimed at managing the risk faced by the group and its subsidiaries: monetary quantification of the risk, valuation of impact on cash, establishment of risk limits, review of the economic and financial structure of the group, reporting and control procedures.
Risk management and governance: development of procedures aimed at establishing risk limits and control methodologies.
Funds Transfer Pricing (FTP): management of the cash risk of groups or of multi-business enterprises.
Credit risk management: monetary quantification of risk, counterpart rating systems based on insolvency probability, transition matrixes, establishment of risk limits and of credit policies.
Market risk management: monetary quantification of risk, econometric models for market predictions, risk coverage systems.
Risk-adjusted measuring systems.
Tax risk and transfer pricing: our framework for the valuation of tax risk is based on the strategies used by Tax Authorities for planning audit activities. Based on the risk profile of the subjects involved and on the score assigned, it is possible to calculate a tax risk indicator. With reference to transfer pricing, by predicting the approach of the Tax Authorities, we are able to identify both the price that minimizes the risk for the group and the level of risk to which the group is exposed.