investors, as well as for private investors including home owners` associations. The company's key risk factors are property mar- ket developments, particularly regarding residential property, which in turn influence the behaviour of BauGrund`s private, institutional, and public-sector clients. The preference by property investors to hold their investments for a short term only pre- vailed during 2008 ­ accordingly, this also resulted in property management and sales agreements being terminated at short notice, upon disposal. BauGrund counters this trend through a highly- diversified order book, in terms of counterparties and contractual terms. 3.6 Other risks 3.6.1 Definition Aareal Bank uses the category of "other risks" to aggregate those types of risk that cannot be quantified exactly: primarily, this includes repu- tational and strategic risks. Reputational risk is defined as the risk of events that negatively affect the bank`s reputation with investors, analysts, or clients. Strategic risk is typically associated with the threat of incorrect assumptions regarding market developments, burdening a bank`s performance as a result. 3.6.2 Risk measurement and monitoring Other risks are predominantly managed and moni- tored through qualitative measures. A Group-wide Code of Conduct sets the framework regarding integrity and professional conduct for all activities. The Code provides a standard that is binding for all employees of the Aareal Bank Group ­ regard- less of position, and hence, including members of the Management Board or supervisory bodies. Accordingly, the Code defines the fundamental standards for the conduct of each individual employee. Each employee or member of an exe- cutive body is personally responsible for comply- ing with this Code of Conduct. The Aareal Bank Group ensures compliance with these standards, employing its internal facilities and organisational units (including, in particular, Internal Audit and Compliance/Anti-Money Laundering/Data Protection). Managers are responsible for raising staff awareness within their area of responsibility. Aareal Bank's Management Board is responsible for managing strategic risk; it coordinates its actions with the Supervisory Board. The Manage- ment Board is supported in this task by Corporate Development, for instance, via the continuous monitoring of trends which may be relevant to business policy. Future opportunities and outlook Development of the environment The deterioration in the economic environment, which became apparent as early as in 2006, was further significantly exacerbated by the crisis affecting financial markets. The global economy collapsed on a massive scale towards the end of 2008, with many countries already in recession or approaching it. The weak economy is burdened further by the financial markets crisis, where banks are facing large-scale write-downs in conjunction with higher capital adequacy requirements. On top of this, banks secure liquidity by investing with central banks, restricting their ability to lend as one of the consequences. In addition, private households saw their wealth diminish, burdening consumption. Sentiment indicators, which already had been in negative territory, fell dramatically during the final months of 2008. The dire mood and negative outlook prevailing in numerous sectors of the economy represent an additional major burden for economic developments over the next 12 to 24 months. Against this background, it is fair to expect the various sources of demand ­ corporate investment, consumption, and exports ­ to remain under 98 Aareal Bank Group ­ Annual Report 2008 | Group Management Report