NATIXIS_REGISTRATION_DOCUMENT_2017

RISKS AND CAPITAL ADEQUACY Overall interest rate, liquidity and structural foreign exchange risks

Overall interest rate, liquidity and 3.9 structural foreign exchange risks

GOVERNANCE AND STRUCTURE 3.9.1

the Treasury Department and the joint refinancing pool , j which came under the authority of the Financial Management Department in 2017 (see Section 3.9.2.1) , are responsible for covering the funding requirements of the business lines, providing operational management of liquidity risk in accordance with applicable risk mandates and limits, implementing the Natixis medium-term refinancing policy adopted by the ALM Committee and operationally managing compliance with the regulatory liquidity ratio; the Risk division , in charge or reviewing ALM conventions a and limits, keeping the Market Risk Committee informed of the validation of overall interest rate risk limits applied to Capital markets activities within the banking scope, and performing Level 2 controls of ALM and the Treasury Department’s indicators; subsidiaries afforded a measure of leeway in terms of a management and which implement local governance and a dedicated ALM mechanism, such as a local ALM Committee , and oversee their structural ALM risks, placed under the general supervisory authority of the ALM Committee. Targets and policy 3.9.2.1 (Data certified by the Statutory Auditors in accordance with IFRS 7) Natixis is affiliated with the central institution of the Caisses d’Epargne and the Banques Populaires banks (BPCE), as defined by the French Monetary and Financial Code. Article L.511-31 of the French Monetary and Financial Code stipulates that central institutions are credit institutions and, as such, they must oversee the cohesion of their network and ensure the proper operation of affiliated institutions and companies. To this end, they take any necessary measures notably to guarantee the liquidity and capital adequacy of all such institutions and companies as well as the network as a whole. In light of the commitments Groupe BPCE has made to the supervisory authorities to ensure and guarantee the liquidity of the bank as lender of last resort, Natixis remains under the supervisory authority of BPCE. This supervision is implemented through governance and an overall liquidity risk management and monitoring system that is adapted, shared and harmonized by all affiliates, and whose main guidelines have been set forth by Groupe BPCE’s ALM Committee. Natixis’ liquidity risk management policy is an integral part of the Group’s policy. It sets out to optimize Natixis’ activities within a clear, shared and standardized framework in terms of governance and ALM regulations, and in line with the Group’s risk constraints. MANAGEMENT OF LIQUIDITY 3.9.2 AND FUNDING RISK

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(Data certified by the Statutory Auditors in accordance with IFRS 7) Natixis’ asset and liability management (ALM) risks are managed and monitored under the authority of the Asset/Liability Management Committee (ALM Committee) , which is chaired by the Chief Executive Officer and composed of the members of the Senior Management Committee in charge of Finance and Strategy, Risks and the Corporate & Investment Banking division, the Head of the Joint Refinancing Pool, the Head of Financial Management and BPCE’s Head of Asset/Liability Management. The Committee meets every two months and is mainly responsible for: defining and monitoring Natixis’ ALM; a approving the major principles in terms of structural balance a sheet risks (structure, delegation of authority, fund transfer pricing, etc.) in compliance with the standard ALM framework set up by BPCE; validating ALM assumptions and conventions underlying a calculations for metrics used to manage and monitor ALM risks; validating limits related to liquidity, overall interest rate (1) and a structural foreign exchange indicators; validating the overall funding policy in conjunction with BPCE a ALM; supervising structural balance-sheet risks and compliance with a limits, including managing excessive leverage risk since 2015; supervising the main balance sheet aggregates and their a development. The ALM Committee’s monitoring scope includes: the banking book of Natixis and its main credit subsidiaries for a overall interest rate risk; Natixis’ entire scope of consolidation for liquidity risk (excluding a insurance subsidiaries, which do not present intrinsic liquidity risks and which are monitored and managed separately in respect of ALM risks); Natixis’ entire consolidation scope for structural foreign a exchange risk. In the interest of fulfilling its duties and to be able to apply the main principles of asset-liability management and ALM control, the ALM Committee delegates certain operational tasks to: the Financial Management Department : a the ALM Department is responsible for updating ALM j principles, standards, conventions and limits. It submits them to the ALM Committee for approval under the oversight of the Risk Department and supervises structural ALM risks on a consolidated basis while verifying the overall consistency of the ALM system. The department is also in charge of ALM, regulatory liquidity ratios and the leverage ratio (see Section 3.9.2.6 and the following sections) ;

Excluding those related to banking portfolios for Capital markets activities that are presented to the Market Risk Committee. (1)

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Natixis Registration Document 2017