Module 1: Overview
What risk management is meant to do for the institution
- Goals and objectives
- Tools and device
How risk management is meant to work
- How risk events are meant to be reported
- How losses and exposures are meant to be addressed
The role of executives and board members in overseeing risk management
- Risk management oversight
- Forecasts of future problems and opportunities
- How risk management can be used in strategy
Benchmarking your institution’s risk management effectiveness and quality to that of competitors
Important terminology (in relation to risk management methods, derivatives, market instruments and their function)
Important initiatives for financial institutions (Basel III, CAD II, Solvency II)
Module 2: How to undertake compliance with initiatives
ICAAP for executives
Benchmark examples
UK FSA guidelines
Samples from various regulators
Exploration of important contents
Executive Summary
Capital Adequacy determination
Capital Planning
Use of the ICAAP
How the ICAAP should be implemented & used at the board level
Module 3: Board Oversight of Financial Risk
Identifying and understanding FX exposure
Defining FX losses
Operational hedging vs. Financial Hedging
Formation of an executive sub-committee
Structuring of the FX risk management apparatus
Structuring reporting: How losses and exposure can be communicated to the board and senior managers
Establishing an FX Risk Management policy
Benchmarking practices
Gathering an understanding of the institution’s FX risk profile
Tools for assessing FX exposure
Tools for monitoring and managing FX exposure
FX Model testing and Backtesting: What executives and the board needs to know in interpreting the results
Glossary of important FX terms
Module 4: Overseeing Credit Risks
Identifying and understanding credit risk exposure
Defining Credit losses
Corporate Credit versus Financial institution credit
Formation of an executive sub-committee
Structuring of the credit risk management apparatus
Structuring reporting: How losses and exposure can be communicated to the board and senior managers
Establishing a Credit Risk Management policy
Benchmarking practices
Gathering an understanding of the institution’s Credit risk profile
Tools for assessing Credit exposure
Client and customer ratings
Trade-credit ratings
Tools for credit monitoring
Establishing the monitoring function
Evaluating the monitoring function
Costly initiatives that must be considered
Data quality and database development
Information technology considerations
Personnel and human resource considerations
Credit model testing and stress testing: What executives and board members need to know in interpreting and using the results
Deciding how much in terms of resources to dedicate to credit risk management
Glossary of important credit terms
Module 5: Overseeing Funding and Liquidity Risks
Identifying and understanding liquidity risk exposure
Defining liquidity-related losses
Formation of an executive sub-committee and collaboration with ALCO
Structuring of the liquidity risk management apparatus
Structuring reporting: How losses and exposure can be communicated to the board and senior managers
Establishing a Liquidity Risk Management policy
Benchmarking practices
Gathering an understanding of the institution’s Liquidity risk profile
Tools for assessing Liquidity risk exposure
Tools for liquidity risk monitoring
Glossary of significant liquidity risk related terms
Module 6: Overseeing Hazard/Operational Risk
Understanding operational risk importance
Operational risk exposures
Hazards and vulnerabilities
How items excluded from the operational risk definition affect executive decision-making
Formation of an executive operational risk committee
Creation of functional risk policy and management manual
Additional terminology
Regulatory initiatives for financial institutions (Basel II, Standardised, and Advanced Measurement Approaches)
Establishing an executive risk tolerance level for operational risk exposure
Gathering the tools for operational risk management
Data considerations
Personnel considerations
Information technology considerations
Governance considerations
Deciding what operational risk approaches to take
Determining how much regarding resources to dedicate to executive risk management
Module 7: Overseeing Strategic Risk
Identifying and understanding Strategic/Competitive risk exposure
Defining Strategic losses
Reconciliation with operational risks and other risks
Structuring of the strategic risk management apparatus
Structuring reporting: How failures and exposure can be communicated to the board and senior managers
Establishing a Strategic Risk Management policy (if necessary)
Benchmarking practices
Gathering an understanding of the institution’s Strategic risk profile
Tools for assessing Strategic risk exposure
Apparatus for monitoring and managing Strategic risk exposure