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Duration 35 hours
Course Outline
Introduction to Risk
- The definition of risk and the rationale for bank management
- Whether risk is solely a negative experience
- The global nature of banking and associated risks
- An overview of major risk categories in banking
- The potential repercussions of inadequate risk management
- Risk Appetite
- Risk Management
Case study
International Risk Regulations
- The nature of risk-based regulations
- The relationship between risk and capital
- Understanding capital adequacy
- Major international regulatory frameworks
- Basel Accords
- Sarbanes-Oxley
Case study
The Basel Accords
- The evolution of international banking risk regulations
- Objectives of banking risk frameworks
- Challenges in applying global regulations
- 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
- Definition of market risk
- Market activities and trading rationale
- Primary market instruments
- Cash instruments
- Derivative instruments
- Management of market risk
- Measurement and control of market risk
- Regulatory frameworks for market risk
- Basel II
- Basel III
Case study: Consequences of poor market risk management – JP Morgan
Credit Risk
- Definition of credit risk
- Credit products in international markets
- Mitigation and management of credit risk
- The credit workflow
- The credit analysis process
- Portfolio management
- Measurement of credit risk
- Regulatory frameworks for credit risk
- Basel II
- Basel III
Case study
Operational Risk
- The nature of operational risk and its significance
- Distinguishing between expected and unexpected losses
- Categories of operational risk events
- The three lines of defense model
- Operational risk management principles
- The operational risk management framework
- Initial steps in implementation
- Reporting structures for operational risk management
- Scope of operational risk management
- Assessment and measurement of operational risk
- Regulatory frameworks for operational risk
- Basel II
- Basel III
Case study: UBS
Liquidity Risk
- Definition of liquidity risk
- Forms of liquidity
- Consequences of poor liquidity management
- Sources of liquidity
- Liquidity measurement techniques
- Stress testing
- Strategies for managing liquidity
- Regulatory frameworks for liquidity risk
- Basel II
- Basel III
Case study:
Asset and Liability Management and Other Risks
- Definition of Asset and Liability Management (ALM)
- ALCOs and Treasury functions
- Differences between the banking book and trading book
- Interest rate risk within the banking book
- Measuring and managing IRRBB
- Contractual vs. behavioral aspects
- Stress testing
- 'Other' risk categories
Case study:
Supervision & Disclosure
- The concept of supervision and disclosure
- Cooperation between home and host supervisors
- The ICAAP (Internal Capital Adequacy Assessment Process)
- Supervisory and disclosure requirements under Basel frameworks
- Changes introduced by Basel III
Case study:
Defining Enterprise Risk Management
- What is ERM?
- The advantages of implementing ERM
- The ERM process
- The function of risk management
- Portfolio management in ERM
- Integration into new product development
- Basel Committee guidelines
- Commonly adopted ERM frameworks
Case study
Integrated Risk Management
- Integrating risks across the entire bank
- The role of risk committees
- Establishing risk policies
- Risk identification and assessment
- Aggregating risks across different types
- Economic capital calculation
- Interactions between various risk types
Case study
Corporate Governance
- The definition of corporate governance
- Identifying stakeholders and resolving conflicts of interest
- The benefits of robust corporate governance
- The evolution of corporate governance – Cadbury, Walker, and Hicks reports
- External perspectives on corporate governance (rating agencies, regulators)
Case study: Can a bank be 'Too big to manage'?
Effective Corporate Governance
- Corporate organizational structures
- The function of non-executive directors
- Governance techniques and strategies
- Committee structures and management practices
- Communication protocols
- The role of senior management
- Internal corporate governance frameworks
- OECD and Basel guidelines
Case study:
Risk Governance
- Governance of risk management functions
- Fostering a culture of risk awareness
- Implementing a risk culture
- Risk management committees
- Integration of governance, risk, and compliance
Case study:
The Future
- The emerging regulatory landscape
- Implications for the banking sector
- Implications for regulators
- Key priorities in the global banking regulatory agenda
- Potential future flashpoints
Testimonials (3)
Fun to talk
Jihan Fadila - BAF
Course - Root Cause Analysis (RCA) for Internal Audit
The exercises were great — they helped me get back “on the field.”
Lilia Boico - PUBLIC
Course - AML/CTF Governance and Risk Oversight Training
casual conversation supported by specific examples
