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Duration 35 hours
Course Outline
Introduction to Risk
- Defining risk and the rationale for bank management
- Is risk solely a downside experience?
- The global dimension of banking and risk
- An overview of major risk categories in banking
- Potential consequences of inadequate risk management
- Risk Appetite
- Risk Management
Case study
International Risk Regulations
- The nature of risk-based regulations
- The connection between risk and capital
- Understanding capital adequacy
- Major international regulatory frameworks
- Basel Accord
- Sarbanes-Oxley
Case Study
The Basel Accords
- The evolution of international banking risk regulation
- Objectives of banking risk oversight
- The challenge of global regulatory consistency
- Basel I Accord and the Market Risk Amendment
- Basel II Accord
- Capital requirements under Basel II
- Basel 2.5 and Basel III
- The leverage ratio
- Countercyclical capital buffer
- Systemic interconnectedness
Case study: Capital under Basel III
Market Risk
- Defining market risk
- Market activities and the rationale for trading
- Primary market instruments
- Cash instruments
- Derivative instruments
- Managing market risk
- Measurement and management of market risk
- Regulation of market risk
- Basel II
- Basel III
Case study: The consequences of mis-managing market risk – JP Morgan
Credit Risk
- Defining credit risk
- Credit products in the international market
- Mitigation and management of credit risk
- The credit process
- The credit analysis process
- Portfolio Management
- Measurement of credit risk
- Regulation of credit risk
- Basel II
- Basel III
Case study
Operational Risk
- Defining operational risk and its significance
- Loss risk: expected versus unexpected
- Types of operational risk events
- The three lines of defence
- Operational risk management
- Operational risk management frameworks
- Initial steps in implementation
- Reporting structures for operational risk management
- Scope of operational risk management
- Measuring and assessing operational risk
- Regulation of operational risk
- Basel II
- Basel III
Case study: UBS
Liquidity Risk
- Defining liquidity risk
- Forms of liquidity
- Consequences of poor liquidity management
- Sources of liquidity
- Measuring liquidity
- Stress testing
- Liquidity management
- Regulation of liquidity risk
- Basel II
- Basel III
Case study:
Asset and Liability Management and Other Risks
- Defining Asset and Liability Management
- ALCOs and Treasuries
- Banking book versus Trading Book
- Interest rate risk in the banking book
- Measuring and managing IRRBB
- Contractual versus behavioral aspects
- Stress testing
- ‘Other’ risks
Case study:
Supervision & Disclosure
- Understanding supervision and disclosure
- Cooperation between home and host supervisors
- The ICAAP
- Supervision and disclosure under Basel standards
- Changes introduced by Basel III
Case study:
Defining Enterprise Risk Management
- What is ERM?
- The advantages of ERM
- The ERM process
- The risk management function
- Portfolio management
- New product development
- Basel Committee guidance
- Commonly adopted frameworks
Case study
Integrated Risk Management
- Integrating risks across the bank
- Risk committees
- Risk policies
- Risk identification and assessment
- Aggregating risk across different types
- Economic capital
- Interactions between risk types
Case study
Corporate Governance
- Defining corporate governance
- Stakeholders and potential conflicts of interest
- The benefits of effective corporate governance
- The development of corporate governance – Cadbury, Walker, and Hicks reports
- The external perspective on Corporate Governance (rating agencies, regulators)
Case study: Can a bank be “Too big to manage”?
Good Corporate Governance
- Corporate structures
- The role of non-executive directors
- Techniques and strategies
- Committees and management practices
- Communication
- The role of senior management
- Internal framework of Corporate Governance
- OECD and Basel guidance
Case study:
Risk Governance
- Governance of risk management
- Cultivating a culture of risk awareness
- Implementing a risk culture
- Risk management committees
- Governance, risk, and compliance
Case study:
The Future
- The new regulatory regime
- Implications for the banking industry
- Implications for regulators
- Priorities in the global banking regulatory agenda
- Future flashpoints
Testimonials (2)
Fun to talk
Jihan Fadila - BAF
Course - Root Cause Analysis (RCA) for Internal Audit
casual conversation supported by specific examples