American Express 2015 Annual Report Download - page 100
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Liquidity risk is managed at an aggregate consolidated level as well as at certain subsidiaries in order to ensure
that sufficient and accessible liquidity resources are maintained. The Funding and Liquidity Committee reviews
forecasts of our aggregate and subsidiary cash positions and financing requirements, approves funding plans
designed to satisfy those requirements under normal and stressed conditions, establishes guidelines to identify the
amount of liquidity resources required and monitors positions and determines any actions to be taken.
MODEL RISK MANAGEMENT PROCESS
We define model risk as the risk of adverse consequences, such as financial loss, poor business and strategic
decision making, or damage to our reputation, from decisions based on incorrect or misused model outputs and
reports.
We manage model risk through a comprehensive model governance framework, including policies and procedures
for model development, independent model validation and change management capabilities that seek to minimize
erroneous model methodology, outputs and misuse. We also assess model performance on an ongoing basis.
STRATEGIC AND BUSINESS RISK MANAGEMENT PROCESS
Strategic and business risk is the risk related to our inability to achieve our business objectives due to poor
strategic decisions, including decisions related to mergers, acquisitions, and divestitures, poor implementation of
strategic decisions or declining demand for our products and services.
Strategic decisions are reviewed and approved by business leaders and various committees and must be aligned
with company policies. We seek to manage strategic and business risks through risk controls embedded in these
processes as well as overall risk management oversight over business goals. Existing product performance is reviewed
periodically by committees and business leaders. Mergers, acquisitions and divestitures can only be approved
following Deal Committee due diligence, a comprehensive risk assessment by operational, market, credit and
oversight leaders and approval by either the Chief Risk Officer or appropriate risk committees. All new products and
material changes in business processes are reviewed and approved by the New Products Committee and appropriate
credit or risk committees.
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