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Provided by: FitchTraining Risk Management in Banks the Capital ImplicationsAccounting and Finance |
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Training
Provided by FitchTraining
A two-day workshop designed to give a better understanding of enterprise risk management procedures within banks and how these risks are addressed by both Basel II and internal economic capital models. An overview of best practice in the identification, monitoring and management of risk.
Related Awards, Degrees or Certifications: Earn CPD credits
We are an accredited training provider with a number of institutions including:
ACCA
NASBA
Securi
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Risk Management in Banks the Capital Implications
Course Objectives
The goal of this workshop is to understand how risks are categorised, quantified, monitored and managed within banks. Specifically, participants will be equipped to:
Identify, categorise and quantify credit, market, liquidity, operational, legal, regulatory and reputation risks
Understand the systems and procedures needed to track, monitor and manage these risks
Relate the risks to the capital of a bank.
Target Audience
The workshop is designed for bankers and analysts but is also appropriate for a broader audience who wish to gain insight into the risk management process and how capital is allocated. The course is targeted at an intermediate level and assumes a basic understanding of banking products.
Content
ANALYTIC OVERVIEW
Overview
Why risk management is critical to banks
An overview of lessons learned from past risk management failures
Understanding differing perspectives: shareholders, regulators, and debt providers.
Risk management
Major risk groups: credit, market, liquidity, operational, legal, regulatory, and reputation
Management objectives risk versus return
Lessons learned from recent risk management failures.
Capital allocation
Types of capital: shareholder, regulatory and economic capital
Regulatory capital: Basel II structure
Pillar I Capital Calculation
Pillar II ICAAP and SREP
Pillar III Disclosure
Economic capital: calculation and uses.
CREDIT RISK
Identifying and quantifying the risk
Importance of credit risk
Defining and quantifying credit risk: probability of default, exposure at default, loss given default
Six categories of credit risk: Lending, Issuer, Contingent, Pre-settlement, Settlement, Country/ transfer
Methodologies for quantifying credit exposures
Potential credit risk mitigants and how they are be used in practice.
Managing credit risk
Limits and safeguards policy, process and procedures
Credit approval authorities and transaction approval process
Documentation: covenant packages, ISDA and CSA and other collateral agreements.
MARKET RISK
Identifying and quantifying the risk
Defining market risk: types of market risk
Trading Book v Banking Book
Value at Risk (VaR): Definition and key concepts: holding periods, confidence levels, disclosure, limitations
Banks disclosures on market risk
Comparative analysis of market risk disclosures.
LIQUIDITY RISK
Identifying, defining and quantifying the risk
Types of liquidity risk: funding and transactional.
How liquidity risks affects different financial institutions
Gap management: interest, currency, and maturity mismatches
Concepts of cash capital
Identifying key areas of risk: double leverage, window dressing, off balance sheet financing and other early warning signals.
Managing the risk
Asset and liability management techniques: gap limits and regulatory requirements
Measuring and managing stress scenarios: elements of a contingency plan
Use of securitisation: impact on capital, credit quality and liquidity.
OPERATIONAL RISK
Identifying, defining and quantifying the risk
Examples of operational risk failures in financial institutions
Best practice systems and management procedures
Statistical challenge of high value, low frequency losses
Capital requirements under Basel II.
LEGAL, REGULATORY AND REPUTATION RISK
Identifying, defining and quantifying the risk
Legal risks and their management
Know Your Customer , money laundering and ultra vires issues
Impact of changing regulations on banks
Managing reputation risk.
The goal of this workshop is to understand how risks are categorised, quantified, monitored and managed within banks. Specifically, participants will be equipped to:
Identify, categorise and quantify credit, market, liquidity, operational, legal, regulatory and reputation risks
Understand the systems and procedures needed to track, monitor and manage these risks
Relate the risks to the capital of a bank.
Target Audience
The workshop is designed for bankers and analysts but is also appropriate for a broader audience who wish to gain insight into the risk management process and how capital is allocated. The course is targeted at an intermediate level and assumes a basic understanding of banking products.
Content
ANALYTIC OVERVIEW
Overview
Why risk management is critical to banks
An overview of lessons learned from past risk management failures
Understanding differing perspectives: shareholders, regulators, and debt providers.
Risk management
Major risk groups: credit, market, liquidity, operational, legal, regulatory, and reputation
Management objectives risk versus return
Lessons learned from recent risk management failures.
Capital allocation
Types of capital: shareholder, regulatory and economic capital
Regulatory capital: Basel II structure
Pillar I Capital Calculation
Pillar II ICAAP and SREP
Pillar III Disclosure
Economic capital: calculation and uses.
CREDIT RISK
Identifying and quantifying the risk
Importance of credit risk
Defining and quantifying credit risk: probability of default, exposure at default, loss given default
Six categories of credit risk: Lending, Issuer, Contingent, Pre-settlement, Settlement, Country/ transfer
Methodologies for quantifying credit exposures
Potential credit risk mitigants and how they are be used in practice.
Managing credit risk
Limits and safeguards policy, process and procedures
Credit approval authorities and transaction approval process
Documentation: covenant packages, ISDA and CSA and other collateral agreements.
MARKET RISK
Identifying and quantifying the risk
Defining market risk: types of market risk
Trading Book v Banking Book
Value at Risk (VaR): Definition and key concepts: holding periods, confidence levels, disclosure, limitations
Banks disclosures on market risk
Comparative analysis of market risk disclosures.
LIQUIDITY RISK
Identifying, defining and quantifying the risk
Types of liquidity risk: funding and transactional.
How liquidity risks affects different financial institutions
Gap management: interest, currency, and maturity mismatches
Concepts of cash capital
Identifying key areas of risk: double leverage, window dressing, off balance sheet financing and other early warning signals.
Managing the risk
Asset and liability management techniques: gap limits and regulatory requirements
Measuring and managing stress scenarios: elements of a contingency plan
Use of securitisation: impact on capital, credit quality and liquidity.
OPERATIONAL RISK
Identifying, defining and quantifying the risk
Examples of operational risk failures in financial institutions
Best practice systems and management procedures
Statistical challenge of high value, low frequency losses
Capital requirements under Basel II.
LEGAL, REGULATORY AND REPUTATION RISK
Identifying, defining and quantifying the risk
Legal risks and their management
Know Your Customer , money laundering and ultra vires issues
Impact of changing regulations on banks
Managing reputation risk.
About The Training Provider: FitchTraining
FitchTraining - Fitch Training is a specialist training firm focused on the provision of credit and corporate finance training. Courses are offered in three areas: financial institutions, corporate credit and securitization. Fitch Training is part of Fitch Solutions, a division of the Fitch Group. We also work in partnership with Fitch Solutions to provide quantitative training.
Fitch Training operates...
