On 25 February 2009, Fitch Ratings affirmed our Long Term Issuer Default Rating of "A-" (stable outlook). The Bank Individual Rating was changed from "C" to "C/D". The Short Term Issuer Default Rating was upgraded from "F2" to "F1". At the same time, the "AAA" ratings of our mortgage bonds and our public-sector covered bonds were affirmed. Overall responsibility for risk management and risk monitoring remains with the Management Board and the Supervisory Board of Aareal Bank. The diagram above provides an overview of the responsibilities assigned to the respective organisational units. 1.2 Strategies The business policy set by the Management Board, and approved by the Supervisory Board, provides the conceptual framework for risk man- agement. Taking this as a basis, and strictly con- sidering the bank`s risk-bearing capacity, we have formulated detailed strategies for managing the various types of risk, which are designed to ascer- tain risks are dealt with consciously and professio- nally. Accordingly, these strategies include general policies, to ensure a uniform understanding of risks across all parts of the bank, and providing a cross-sectional, binding framework applicable to all departments. The bank has implemented ade- quate risk management and risk control processes to implement these strategies, and to safeguard the bank`s risk-bearing capacity. During the finan- Risk report 1. Aareal Bank Group Risk Management The assumption of risk is an integral part of banking business. In order to control risk in a responsible manner, and to ensure the sustained development of the company, our operational de- cision-making process centres around professional risk management. Against this background, we have established a comprehensive system for the measurement, limitation and control of risk, which we continuously update and expand, using considerable human and technical resources. 1.1 Risk management ­ scope of application and areas of responsibility Aareal Bank Group' business activities comprise the Structured Property Financing and Consulting/ Services segments. Aareal Bank AG, as the parent entity of the Group, has implemented extensive systems and procedures to monitor and manage the Group's risk exposure. Uniform methods and procedures are deployed to monitor the risks generally associated with banking business across all entities of the Aareal Bank Group. Since the risks the Consulting/Services segment is exposed to differ profoundly from those of the banking business, specific risk monitoring methods have been developed and deployed to suit the relevant risk exposure at the respective subsidiary. In addition, risk monitoring for these subsidiaries at a Group level is carried out via the relevant control bodies of the respective entity, and investment controlling. Overall responsibility: Management Board and Supervisory Board of Aareal Bank AG Type of risk Risk management Risk monitoring Market price risks Treasury; Dispo Committee Risk Controlling Liquidity risks Treasury Risk Controlling Property Finance Single exposures Credit Business Market, Credit Management Risk Contolling, Credit Management Property Finance Portfolio risks Credit Management, Credit Portfolio Management Risk Controlling Treasury business Treasury; Counterparty and Country Limit Committee Risk Controlling Country risks Treasury, Credit Management, Counterparty and Country Limit Committee Risk Controlling Operational risks Process owners Risk Controlling Investment risks Corporate Development Risk Controlling, Corporate Development, Controlling bodies Process-independent monitoring: Internal Audit Creditrisks 79Aareal Bank Group ­ Annual Report 2008 | Group Management Report