Market risks

Market risk comprises the Group’s exposure to adverse movements in market prices (general and specific interest rates, exchange rates, share prices, spreads) stemming from its Treasury and Financial Market activities. As a general rule, the market risks generated by the other businesses are hedged.

Dexia's market risks relate essentially to European interest rates. The risks in equities and in foreign exchange remain much smaller.

The main risk indicator within the Group is Value at Risk (VaR).

Organization
The main decisions regarding Market Risk Management are taken by Dexia's Management Board, on the GRM team's recommendation.

Risk exposures
The treasury & financial markets (TFM) activities of Dexia are mainly oriented as a support function for the Group. The risk consumption of the financial activities of Dexia reached an average EUR 29.8 million VaR in 2006 (excluding DenizBank).