Risk and capital management  Risk management 86 Lines of defense Risk management in 2013  1 1 Please note that the information here is intended as an overview only. A more detailed explanation of credit risk, equity and other investment risk, interest rate  risk, currency exchange rate risk, liquidity risk, underwriting risk and operational risk, as well as other company-wide risk management policies may be found in  note 4 of the consolidated financial statements. Further information on sensitivity analyses may also be found on these pages. Annual Report 2013 ■ The Enterprise Risk Management Committee (ERMC), which  supports Enterprise Risk Management (ERM) framework  development and maintenance, including risk strategy, risk  governance, risk tolerance, risk methodology and risk policies; ■ The Group Risk & Capital Committee (GRCC), which, as the  primary balance sheet management committee of Aegon,  supports risk oversight. enterprise risk management, in particular the risk strategy,  risk governance, risk tolerance, and material changes in risk  methodology and risk policies.  The SBRC is responsible for overseeing Aegon's enterprise risk  management framework, including risk governance and measures  taken to ensure risk management is integrated properly into the  company's broader strategy. The SBRC oversees the company's  risk exposure as it relates to capital, earnings and compliance  with Group Risk policies. It is the responsibility of the EB and the  Group CRO to inform the SB of any risk that directly threatens  the solvency, liquidity or operations of the company. Details of  members of the SBRC can be found on pages 96 and 97 of this  Annual Report. The MB is supported by two committees: and issues, and further sensitivity and scenario analyses, either  at its own initiative or at the request of management. Group Risk is responsible for development and oversight  of compliance with the risk governance framework, risk  methodology, risk tolerances and risk policies. This involves  identifying risk, particularly operational and emerging risk, as  well as reviewing risk assessments carried out by business units.  Group Risk also identifies best risk management practices,  facilitates implementation thereof and helps ensure there is  consistency in the application of these practices across the  company. In addition, Group Risk performs risk and scenario  analyses, either at its own initiative or at the request of  management. Aegon’s risk management staff structure is fully integrated.  Business unit CROs have a direct reporting line into the Group  CRO or one of the regional CROs that report directly into the  Group CRO. Regions include the Americas, the Netherlands,  United Kingdom, Central & Eastern Europe, Asia, Spain, Variable  Annuities Europe, Aegon Asset Management, and the holding. Aegon’s risk management structure is organized into three  ‘lines of defense’ to ensure conscious risk-return decisions and  limit the magnitude of potential losses within defined levels of  certainty. The objective of this structure is to avoid surprises  due to unidentified risks materializing or losses that exceed  predefined risk tolerance levels and related limit structures. The ERMC can seek advice on significant ERM framework  development work from temporary working groups comprising  subject matter experts who represent the company’s businesses.  These working groups are established by the ERMC, including  their membership, scope of work and deliverables. The GRCC focuses on managing Aegon’s overall solvency and  liquidity position, while ensuring that risk taking is within the risk  tolerance statements and Group Risk policies. The GRCC informs  the MB about any identified or near breaches of overall tolerance  levels, as well as any potential threats to the company’s  solvency, liquidity or operations. Risk & Capital Committees  (RCCs) have been established at each of Aegon’s regions.  The company’s first line of defense, including the business and  support functions, has direct responsibility for managing and  taking risk in accordance with defined risk strategy, risk tolerance  and risk policies. The second line of defense, including the risk  management function, facilitates and oversees the effectiveness  and integrity of enterprise risk management across the  company. The third line of defense, including the audit function,  provides independent assurance and challenge regarding the  effectiveness and integrity of enterprise risk management across  the company. The responsibilities and prerogatives of the RCCs are set out in  their respective charters and are similar in content to those of  the GRCC, but are tailored to local circumstances. Group Risk is  responsible for the development, maintenance and oversight of  compliance with the ERM framework, including risk strategy, risk  governance, risk tolerance, risk methodology and risk policies.  Group Risk also keeps oversight of material risk, balance sheet  and commercial decisions taken throughout the company.  Group Risk further identifies good risk management practices,  facilitates implementation thereof, and helps to ensure that  there is consistency in the application of these practices across  the company. In addition, Group Risk prepares risk management  information, including information about current risk exposures  The effects of the global crisis that began in 2008 continued  to be felt throughout 2013. General economic and business  conditions remained difficult, especially in Europe where  economic growth is low and sometimes even negative. Equity  markets are driven mainly by announcements by the United  States Federal Reserve Board relating to its policy of quantitative  easing. Interest rates remain low, although a significant increase  was seen in the third quarter of 2013. Credit spreads remained  at the level of end of 2012. 