Risk management

In view of the tough macroeconomic climate and market conditions the Group has put in place a stringent plan of action designed to ensure maximum efficiency and competitiveness. The strategic directions for the three years 2009-2011 and relative measures were announced on 11 February 2009.

The main risks and uncertainties that the group faces are:

Financial risks

The financial risks facing the Group are linked to exchange rate variations, the ability to procure financial resources in the markets, changes to interest rates and the threat of customer insolvency.

Financial risks are managed centrally in accordance with guidelines issued by General Management which define the different categories of risk and specify appropriate procedures and operating limits.

Foreign exchange risk

Interest rate risk

Price risk associated with financial assets

Credit risk

Liquidity risk

Exposure to interest rate risk depends on the volatility of rates and the impact on the funding of operations and the use of available liquidity. The risk of higher rates on variable interest debt is indirectly offset by index-linked lending as well as the use of derivatives, typically interest rate swaps and collars.