The Board is responsible for establishing adequate policies and procedures to ensure that the risks inherent in Major Acquisitions are identified, understood and mitigated to the extent possible. At a minimum, policies and procedures must require:
a) Approval by the Board; and
b) Reporting that enables the Board and senior management to monitor and manage the risks on an ongoing basis.
Acquisitions, purchase of all or part of a business, or other changes to Bank or group structure may lead to increased risks for the Bank, or if applicable, group. For this reason, all Major Acquisitions must be approved by the Board, in accordance with the Board-approved policy. Elements of the review by the Board, of a Major Acquisition must include, but are not limited to the assessment of:
a) Risks and impacts on the Bank’s capital, income, liquidity, overall financial position and compliance with prudential requirements under a variety of scenarios, particularly with more pessimistic assumptions than in the baseline case;
b) Risks and impacts on existing customer exposures, documentation and services;
c) The extent to which the Bank’s business lines, risk management, legal and regulatory compliance and information technology functions have the necessary expertise, systems and other tools to measure and manage the associated risks.