86 NOTE 2: Major structural transactions and material events during the period N/A NOTE 3: Financial Management, risk exposure and hedging policy CFM Indosuez Wealth’s Finance department is responsible for organising financial flows within CFM Indosuez Wealth Group, implementing refinancing rules, asset and liability management and themanagement of the prudential ratios which are under the local responsibility of theCFM. It defines the principles and ensures the consistency of the Group's financial management. Banking risks aremanaged within the Group by the Risk and Permanent Controls Department (DRC) and the Finance Department (DF). These Departments report to the General Management of CFM Indosuez Wealth and are respectively responsible for the control and permanent monitoring of credit and operational risks (Risk and Permanent Control) and the control and permanent monitoring of financial and liquidity risks (Finance). 3.1 CREDIT RISK The monitoring of credit and counterparty risks at CFM IndosuezWealth Management is carried out by the Risk and Permanent Control department. Counterparty risk is focusedon thecustomer lendingbusiness and is part of Wealth Management business line’s risk management strategy, approved by the governing bodies of CA CIB and CA SA. CFMIndosuezWealthManagement isexposed tocounterparty risk with respect to natural persons, legal entities, wealth structures whose beneficial owners are natural persons or commercial companies related to an entrepreneur customer whose activity or decision-making centre is based inMonaco. Any exception to this scope of counterparties is subject to prior approval by the Indosuez GroupExecutiveManagement and its Risk department. 3.1.1 Change in book values and value adjustments for losses over the period Value adjustments for losses correspond to the impairment of assetsand toprovisions for off-balancesheet commitments recognised innet income (“Cost of risk”) relating to credit risk. The following tables present a reconciliation of the opening and closing balances of value adjustments for losses recognised under Cost of Risk and the related carrying amounts, by accounting category and type of instrument.
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