Monday 16 Aug 2021
- Duration: Two Weeks
- City: Madrid
- Fees: 8200 GBP / Online: 4100 GBP
Monday 16 Aug 2021
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Introduction
This 10 Days course will develop an understanding of the importance of operational risk management within the Banking and Finance industry and build an appreciation for the impact operational risk can have. The focus is on the practical implication of operational risk, rather than just the theory. To this end real-world examples and case studies are used throughout. The aim is that participants not only leave with a better understanding of operational risk, but also how better to manage it. The goal of this course is to understand how risks are categorized, quantified, monitored and managed within banks, and the related regulatory requirements.
Course Outcomes:
Who should attend?
The course is suitable for risk managers, regulators, internal auditors, bankers and analysts, but is also appropriate for a broader audience who wish to gain a better understanding of risk management processes within a bank and how they are regulated. It is targeted at an intermediate level and assumes a basic understanding of accounting, financial products and banking functions.
Course Outlines:
Day 1
Risk Management
Identifying and defining major risk groups and how they arise in the derivatives business: market, credit, liquidity, operational and reputation
Lessons learned from risk management failures in derivatives
Exercise: Company failures caused by derivatives
Day 2
Analytic Overview
The aim of this section is to introduce the inherent risks of a bank’s balance sheet and the need for capital to cover these risks.
Analyzing Banks
Day 3
Key Risk Areas
Risk Management Failures
Day 4
Regulatory Capital in Banks
Day 5
Market Risk
This section introduces sources of market risk in the balance sheet and how this risk can be quantified and managed. Finally, the section covers the principles of regulatory capital allocation for market risk.
Definitions and Sources of Market Risk
Value-at-Risk (VaR)
Regulatory Capital for Market Risk
Day 6
Credit Risk
Credit risk is possibly the most important risk faced by most commercial banks. This section explains the nature of credit risk, including the relevant products, types of credit risk, quantification and regulatory capital methodologies.
Identifying Credit Risk
Credit Risk Indicators
Day 7
Mitigating Credit Risk
Quantifying Credit Risk
Regulatory Capital for Credit Risk
Day 8
Counterparty Risk
Counterparty risk has grown in significance in recent years. It represents a combination of market and credit risk and is related mainly to OTC derivatives transactions. This section explains the nature of counterparty risk, risk mitigation and how regulatory capital methodologies for credit risk incorporate counterparty risk.
Defining Counterparty Risk
Quantifying Counterparty Credit Exposure
Regulatory Capital for Counterparty Risk
Day 9
Operational Risk
Operational risk was a new risk to be quantified under Basel II, and occurs throughout a bank’s business model. This section aims to explore some of the challenges that face banks in controlling, quantifying and allocating regulatory capital to operational risk.
Defining Operational Risk
Legal and Reputational Risks
Regulatory Capital for Operational Risk
Day 10
Liquidity Risk
Liquidity risk can be the most acute form of risk facing a financial institution at times of crisis as this is often the means by which providers of bank funding express dissatisfaction with management of other risks (e.g. credit risk). The aim of this section is to explore types of liquidity risk, how these risks are managed and the regulatory requirements faced by banks.
Nature of liquidity risk
Liquidity Risk in Financial Institutions
Liquidity Risk Regulation