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A Blueprint for Better Banking: Svenska Handelsbanken and a proven model for more stable and profitable banking by Niels Kroner

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7: Risk Management

Handelsbanken’s Approach to Risk Management

Philosophy

Handelsbanken’s core philosophy is to take risks only in those areas where they have demonstrable strengths, and to reduce all other risks as much as economically possible. Its risk management is organised accordingly, with credit risk, where the bank sees its competitive advantage, handled mostly in a decentralised way and most other risks in a more centralised way. The responsibility for lending lies first and foremost with the branches. Larger loans involve a review of the loan application by the regional bank or even the central organisation in Stockholm – but they merely veto or validate what the branch intends to do. Well over half (57%) of loans by number are ...

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