Operational risk is present in every activity of financial institutions. It has been formalized in regulatory from the early 2000’s onwards, and applied by various banks with different approaches and methods. This to various degrees of success: it has proven all too often to be a time-consuming effort not always apt to steer banks away from disasters. We cover here the inevitable regulatory aspects as we as the managerial aspects.

Most large recent pre-covid losses have been due to the occurrence of operational risks. Whilst financial institutions think they know about this type of risks, the profession has been slow to learn from other older industries dealing with catastrophic risk on a daily basis. The banking world has not been able to avoid large debacles due to e.g. rogue trading and macroeconomic turbulences. It is now critical for banks to set up comprehensive frameworks to handle these risks at reasonable costs, of course to the satisfaction of regulators, without compromising a general drive to go forward and advance in sophistication.

Banks now, more than ever in the post-pandemic world, have to find out, formalize and implement techniques to identify, understand, measure and proactively handle operational risks. Methods for that can vary, but one has to find the optimal methods, as the price of failure and the rewards for success are too high: straight loss, regulatory and societal effects, reputational loss etc. can no longer be neglected.

Course Objectives: 

• Browse through an introduction to operational risk regulation

• Understand the key classical tools for managing operational risk in financial institutions

• Explain the limits of these techniques and how to overcome these

Course Outline:

• Operational risk common frameworks and other tests

• Minimum capital requirements for operational risk

• The Basel Accords, and the next ones to come

• Internal and external compliance

• Effective approaches to risk-based economic capital management

• Measuring Risk-Adjusted Return On Capital (Raroc)

• When the world is neither deterministic nor stochastic

• Relationship with other risks

• A real-life case study

• Understanding risk tolerance

What You Get:

• Training Materials

• Live Q&A Session with our Expert

• Participation Certificate

• Access to Signup Community (Optional)

• Reward Points

Who Will Benefit:

The following professionals from the banking and finance industry will benefit from this training: 

• Risk Methodology

• Credit risk, counterparty Risk

• Regulatory and Economic Capital

• Basel Accord implementers

• Regulation & Compliance 

• Operational Units Managers

• Financial Institutions Advisory 

• Bank Supervision and regulation