According to the assessment made by the European Court of Auditors (ECA), there is a strong demarcation between the management of financial and operational risks in the European Central Bank (ECB). In addition, the annual accounts of the ECB contain only brief information about certain risk management issues.

The European Court of Auditors (ECA) published a report which concludes that the ECB has established a comprehensive organisational structure, roles and responsibilities are clearly assigned, but that there is a strong demarcation between the management of financial and operational risks in the Bank. This increases the risk that the view of the Bank’s exposures might not be comprehensive. Last 30 of May, ECA published another report that showed that modernisation of agricultural holdings could be better targeted.

With regard to these conclusions, the Court recommends to consider setting-up a hierarchically independent, single, risk management function, such as a chief risk officer or committee that would concentrate solely on risk management and ensure a comprehensive view of the Bank’s exposures. Besides it recommends further improving its public disclosure of risk management practices to external parties in the annual accounts by applying best practices, such as IFRS 7.

These recommendations are made to the European Central Bank to further improve its overall risk management. According to the report, the review of the financial risk management framework indicated that although improvements are required in the practical application of the methodology, the financial risk management methodology designed is sound and adequate for the management of investment and policy operations at the ECB.