CONVOCATÒRIA D’UN CONCURS PER A LA PRO VISIÓ D’UN LLOC DE TREBALL DE L’INSTITUT

1. Risk-taking: general principles

All credit transactions require in-depth analysis of the customer’s ability to repay the debt and the most efficient way of structuring the transaction, particularly in terms of security and maturity. This analysis must comply with the risk strategy of the business line concerned and with all limits in force, both individual and aggregate limits. The final lending decision is based on an internal rating and an independent opinion given by a representative of the risk management and permanent control function as part of the authorisation system in place. The Group Risk Management Committee and its chairman constitute the Group’s ultimate decision-making authority. For the Regional Banks, this responsibility is borne by their Board of Directors, in accordance with prerogatives given to Crédit Agricole S.A. by the Code Monétaire et Financier.

The principle of a risk limit applies to all types of counterparty, whether business enterprises, banks, financial institutions, governments or quasi-governmental entities.

Each lending decision requires an analysis of the relationship between the risk taken and the expected return. In the corporate and investment banking business, an ex-ante calculation of the transaction’s expected return is carried out (RAROC – risk-adjusted return on capital).

2. Risk measurement methods and systems

2.1.INTERNAL RATING AND CREDIT RISK CONSOLIDATION SYSTEMS

In late 2007, the Commission Bancaire authorised the Crédit Agricole Group to use internal rating systems to calculate regulatory capital requirements for credit risk on the greater part of its retail and corporate loan books.

Governance of the rating system relies on the Standards and Methodologies Committee (CNM), chaired by the Group’s head of Risk Management and Permanent Controls, whose task is to validate and disseminate standards and methodologies relating to measuring and controlling risks within Crédit Agricole group.

In retail banking, each entity has the responsibility of defining, implementing and substantiating its rating system, in accordance with the Group standards established by Crédit Agricole S.A. LCL and the consumer finance subsidiaries (Sofinco, Finaref and Lukas Bank) have their own credit rating systems. The Regional Banks have common risk assessment models which are managed at the Crédit Agricole S.A. level. Back- testing procedures for the parameters used in calculating the regulatory capital requirement have been defined and are operational in all entities. These parameters are gradually being integrated more closely into each entity’s risk management system.

For the large-customer category, a single fifteen-grade rating scale has been established on the basis of a segmentation of risk so as to provide a uniform view of default risk over a full business cycle. The scale comprises thirteen ratings (A+ to E-) for counterparties that are not in default (including two ratings for counterparties that have been placed under watch) and two ratings (F and Z) for counterparties that are in default.

Crédit Agricole Group

rating A+ A B+ B C+ C C- D+ D D- E+ E E-

Indicative Moody’s rating

equivalent Aaa Aa1-Aa2 Aa3-A1 A2-A3 Baa1 Baa2 Baa3 Ba1 Ba2 Ba3 B1-B2 B3 Caa-Ca-C Indicative Standard & Poor’s

rating equivalent AAA AA+-AA AA-/A+ A/A- BBB+ BBB BBB- BB+ BB BB- B+/B B- CCC/CC/C

Within the Crédit Agricole Group, the large-customer category comprises primarily sovereigns and central banks, corporates and specialised financings as well as banks, insurance companies and other financial companies. An internal rating method tailored to the type-specific risk profile, based on quantitative and qualitative criteria, is applied to each type of customer within the category. For corporate clients, Crédit Agricole Group entities have common internal rating methodologies. A rating is assigned when a relationship with the counterparty is first initiated, and that rating is updated upon each request for a credit limit and upon any event that could affect risk quality. The rating assignment must be approved by a unit independent of the front office. The rating is reviewed at least annually. To ensure that each counterparty carries one and only one rating within the Crédit Agricole S.A. Group, a single entity in the Group is responsible for rating it. The rating oversight process implemented by Crédit Agricole S.A., its subsidiaries and the Regional Banks aims to ensure:

• uniformity in the handling of default events on a consolidated basis; • proper utilisation of the internal rating methodologies;

• reliability of the data supporting the internal rating;

• back-testing of the internal rating methodologies, which is performed annually. For large customers, the oversight results are presented to the Standards and Methodologies Committee as well as the Group Risk Management Committee.

Furthermore, Crédit Agricole S.A., its subsidiaries and the Regional Banks continue to focus on improving the risk-tracking system for:

• single-client and group risk management, which is designed to ensure accurate identification of counterparties on which there is a risk and to improve cross-functional single-client information management, which is crucial to ensuring rating uniqueness and consistent allocation of exposures to Basel portfolios. This work is part of efforts to improve the data used to monitor risk and calculate regulatory ratios;

• the closing process, which aims to improve the capital adequacy ratio production process at each balance sheet date, mainly to ensure the reliability and completeness of the data used to calculate the ratios. Having internal rating systems deployed throughout the Group enables it to implement counterparty risk management based on Basel II-type indicators. In corporate and investment banking, expected loss, economic capital and risk-adjusted return measurements are used in the processes for making loan approval decisions, defining risk strategies and setting risk limits.

Efforts during 2008 were devoted in particular to complying with commitments made to the Commission Bancaire as part of the authorisation process, to coordinating the roll-out work and to deploying the second and third pillars of Basel II. Control procedures were strengthened to enhance reliability, with procedures for reconciling accounting data with risks, procedures for managing and administering data, and specific procedures for monitoring ratings.

2.2.CREDIT RISK MEASUREMENT

The measurement of credit risk exposures includes both drawn facilities and confirmed unused facilities. To measure counterparty risk on capital markets transactions, Crédit Agricole S.A. and its subsidiaries use an internal method for estimating the underlying risk of derivative financial instruments such as swaps and structured products.

The risk basis is the sum of the positive market value of the instrument and an add-on coefficient applied to the nominal amount. This add-on coefficient represents the potential credit risk arising from the change in market value of derivative instruments during their residual lifespan. It is calculated using the type and residual lifespan of the instrument, based on a statistical observation of movements in its underlying instruments. Crédit Agricole S.A. and its subsidiaries use this method for the internal management of counterparty risk, and it differs from the regulatory approach used to meet the measurement requirements of European and international capital adequacy ratios or for reporting major risks.

Moreover, to reduce exposure to counterparty risks on derivatives, Crédit Agricole S.A.’s corporate and investment banking businesses, through the medium of Calyon, usually enter into netting and collateralisation agreements with their counterparties.

3. Supervision system

Rules for dividing and limiting risk exposures, along with specific decision-making and monitoring processes relating to commitments, are used to prevent any excessive concentration of the portfolio.

3.1. PROCESS FOR MONITORING CONCENTRATIONS BY COUNTERPARTY OR GROUP OF RELATED COUNTERPARTIES The consolidated commitments of all Crédit Agricole Group’s entities are monitored by counterparty and by group of related counterparties. A group of related counterparties is a set of French or foreign legal entities that are connected, regardless of their status and economic activity, in such a way that the total exposure to the risk of default of this group can be measured on the basis of exposure to one or more of these entities. Commitments to a counterparty or group of counterparties include all loans granted by the Group as well as corporate finance operations, bond portfolios, financing commitments and counterparty risks relating to capital market transactions. Exposure limits for counterparties and groups of counterparties are recorded in the internal information systems of each subsidiary or business line.

Each operating entity reports the amount of its commitments by risk category on a monthly or quarterly basis to the Group Risk Management and Permanent Controls division. Exposures to major non-bank

counterparties, i.e. those on which the aggregate commitments of the Crédit Agricole Group exceed €300 million after netting, are reported separately to the Group Risk Management Committee.

At year-end 2008, lending commitments of Crédit Agricole S.A., its subsidiaries and the Regional Banks to their ten largest non-sovereign, non-bank customers amounted to less than 5.6% of the total non-bank portfolio (less than 5% at 31 December 2007), showing good diversification of that portfolio.

For the Regional Banks and LCL, major counterparty risks are monitored mainly via the Foncaris subsidiary. At 31 December 2008, Foncaris provided a 50% guarantee on €9.1 billion of the Regional Banks’ and LCL’s exposures to major counterparties (€8.1 billion at 31 December 2007).

3.2. PORTFOLIO REVIEW AND SECTOR MONITORING PROCESS

Periodic portfolio reviews conducted by entity or business line serve to identify counterparties whose credit quality is deteriorating, update counterparty ratings, monitor risk strategies and check on changes in concentration ratios. Portfolio reviews are also conducted by business sector. Lastly, the corporate and investment banking business has a portfolio modelling tool that it uses to test how well portfolios hold up under stress scenarios.

Regional Banks organise portfolio reviews at their level and develop sector monitoring fit with their risk profile.

3.3. PROCESS FOR MONITORING COUNTERPARTIES IN DEFAULT AND ON CREDIT WATCH

Counterparties in default and on credit watch are monitored closely by the business lines, in collaboration with risk management and permanent control officers. They are also the object of formal monitoring by the entities’ sensitive exposure committees and quarterly consolidated monitoring by the Group Risk Management Committee and the Audit Committee.

3.4. CONSOLIDATED RISK MONITORING PROCESS

Every quarter, the Group Risk Management Committee examines the risk scorecard produced by the Group Risk Management and Permanent Controls division. This document gives the Committee a detailed review of the Group’s risk situation on a consolidated basis across all business lines. In addition, detailed periodic reviews of banking risks, country risks and the main non-banking risks are conducted during Group Risk Management Committee meetings.

In 2008, consolidated risk monitoring continued to benefit from deployment of the Basel II reforms, particularly as regards improvements in internal rating systems, consolidated counterparty management and the scope covered by the risk centralisation system.

3.5. STRESS SCENARIO IMPACTS

Credit stress scenarios are applied periodically in conjunction with the business lines to assess the risk of loss and consequent changes in capital requirements in the event of a sharp deterioration in the economic and financial environment. The results of these stress tests are examined in meeting of the Group Risk Management Committee or the Executive Committee. In 2008 these results were also provided to the Board of Directors of the Crédit Agricole S.A. Group.

4. Credit risk mitigation mechanisms 4.1. COLLATERAL AND GUARANTEES RECEIVED

Guarantees and collateral are intended to provide partial or full protection against credit risk.

The principles governing the eligibility, utilisation and management of collateral and guarantees received as security are defined by the Crédit Agricole Group’s Standards and Methodologies Committee (CNM), in accordance with the CRD system implemented as part of the Basel II capital ratio reform. This common framework ensures a consistent approach across the Group’s various entities. It documents aspects that include the conditions for prudential recognition, valuation and revaluation methods of all the various credit risk mitigation techniques that are used: security in the form of property (land and buildings, aircraft, ships, etc., especially for asset financing), security in the form of guarantees, public export credit insurance, private credit insurance, financial guaranty insurance, credit derivatives, and cash collateral. The entities are in charge of implementing this framework at the operational level (management, monitoring of valuations, implementation).

Details of guarantee commitments received are presented in Note 8 of the Notes to the consolidated financial statements.

Regarding financial assets obtained by enforcement of guarantees or credit enhancement provisions, the Group’s policy on assets that have come into its possession by this means is to sell them as soon as possible.

4.2. USE OF NETTING CONTRACTS

If a master contract has been agreed with a counterparty to permit it, Crédit Agricole S.A. and its subsidiaries net their exposures to that counterparty. Crédit Agricole S.A., its subsidiaries and the Regional Banks also use collateralisation techniques (deposits of cash or securities) to reduce their position risks.

4.3. USE OF CREDIT DERIVATIVES

In managing its banking book, the Group’s corporate and investment banking business uses credit derivatives and a range of risk-transfer instruments including securitisation. The aim is to reduce concentration of corporate credit exposures, diversify the portfolio and reduce loss levels. The risks arising from such operations are monitored by Calyon’s Market Risk Management division with the help of indicators such as VaR (value at risk) on all cash transactions through which Calyon buys or sells protection for its own account.

The notional amount of protection bought by Calyon in the form of credit derivatives outstanding at 31 December 2008 was €22 billion (€14.7 billion at 31 December 2007). The outstanding notional amount of protection sold by Calyon was €976 million (€2.0 billion at 31 December 2007).

III. Exposure

1. Maximum exposure

The maximum exposure to credit risk of Crédit Agricole Group corresponds to the carrying amount of financial assets (loans and receivables, debt instruments and derivatives) before the effect of non- recognised netting agreements and collateral.