BPCE - 2018 Registration document

6 RISK REPORT

Risk governance and management system

uses Pilcop to implement, centralize and capitalize on the ● permanent controls carried out by the Risk, Compliance and Permanent Control divisions. The various permanent control standards are overseen and constantly updated and expanded in Pilcop. Activities in 2018 In 2018, the DRCCP carried out several structure-building projects aimed at reinforcing the Group’s permanent control system: the Permanent Control Coordination department monitored the ● application of control standards, i.e. the framework document BPCE’s Supervisory Board approved the Group’s Recovery Plan (RP) for 2018. The plan is in line with European regulatory measures on the recovery and resolution of banks and investment firms and the provisions of the French Monetary and Financial Code. The objective of the Recovery Plan is to identify measures to restore the Group’s financial solidity in the event it deteriorates significantly. The plan presents the options available to the Group to launch a crisis management system. It assesses the relevance of the different options in various crisis scenarios and the methods and resources available for their implementation. The Recovery Plan is mainly based on the: the Group’s organization and the specific implications of its ● cooperative status; identification of the Group’s critical responsibilities; ● capital and liquidity management systems; ● analysis of financial crisis scenarios; ● mapping of the main entities and an analysis of their contribution ● in terms of capital adequacy, liquidity and earnings capacity; Recovery Plan 6.4.3

governing the Group’s permanent control system (operational adaptation of the internal control charter) and the control sampling standard, which is based on random, representative samples; The main permanent control forms in Pilcop were finalized, with ● the aim of continuing to converge the Banque Populaire banks and the Caisses d’Epargne towards a single control framework and optimize the number of items covered by controls; the DRCCP also worked on the annual control plan and the ● risk-based approach, with a focus on harmonizing the system.

identification of the options that will have a significant impact on ● the Group’s financial recovery; preventative monitoring of leading indicators on the financial and ● economic situation; establishment of the organizational structures needed to ● implement the recovery. This system is monitored and coordinated by a permanent office at BPCE. The Recovery Plan is kept up to date and approved by the Supervisory Board, aided by its Risk Management Committee for these purposes. The Recovery Plan is updated annually. In addition to updating its Recovery Plan, the Group ran a test to make sure it would be able to mobilize quickly to handle a financial crisis impacting its solvency. During the simulation, the Group successfully rallied several of teams and its Executive Management Committee. This test, recommended by the supervisory authorities, will be periodically reiterated with the aim of improving the Group’s crisis readiness.

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Registration document 2018