Market and financial risks

In the conduct of its operations, the Group is exposed to various financial risks: market risk (interest-rate risk and inflation risk), liquidity risk and credit risk.
As part of the policies approved by the Board of Directors, the Terna Group has defined responsibilities and operational procedures for the management of financial risk, making specific reference to the tools considered acceptable and setting clear operating limits for their use.
The risk management policies adopted by Terna seek to identify, analyse and monitor the risks to which the Company is exposed, establishing appropriate limits and controls, and checking compliance with such limits. These policies and related systems are reviewed on a regular basis in order to reflect any changes in market conditions and the activities of the Group. For more information, see the section “Risk management - Terna S.p.A.” in Section “A. Accounting policies” of the notes
to the 2010 financial statements.