Trading revenue Non-traded market risk The effectiveness of Macquarie’s risk management  methodology can be measured by Macquarie's daily  trading results. In light of uncertain market conditions, the  small quantity and magnitude of daily losses incurred  by Macquarie are indicative of both an effective risk  management framework and business operations  focused on servicing client needs. Macquarie's market risk activities continue to be based on  earning income from spreads, franchise businesses and  client flows. The majority of trading income is derived from  client franchise activities rather than outright proprietary  trading activity. Macquarie’s trading approach has shown consistent profits  and low volatility in trading results over time. This is evident  in the graph below, and reflects the client-based nature of  trading activities. In FY2014 Macquarie made a net trading  profit on 220 out of the 261 trading days (2013 results:  221 out of 260 trading days).  Macquarie also has exposure to non-traded interest rate risk,  generated by banking products such as loans and deposits.  Interest rate exposures, where possible, are transferred into  the trading books of FICC and Group Treasury and managed  under market risk limits. However, some residual interest rate  risks remain in the banking book due to factors outside the  interest rate market or due to timing differences in  accumulating exposures large enough to hedge. These  residual risks in the banking book are monitored and  controlled by RMG and reported to senior management  regularly. Daily Trading Profit and Loss 31 