Managing FX Operational Risk
What Will You Learn
By the end of the training participants will:
Main Topics Covered During This Training
Who Should Attend
Operations and business staff at all levels involved in any aspect of FX. This will include:
- The size of the market
- Who the participants are (both key players and occasional users).
- How the market is developing and its past growth.
- How foreign exchange operates.
- We provide a range of examples that clearly illustrate the operation of foreign exchange markets in terms of the transactions, how they are processed and how they are settled.
- What does the jargon mean – we explore foreign exchange definitions.
- Foreign exchange settlements – Correspondent banking and Continuous Linked Settlement (CLS).
- What is risk?
- What are the different types of risks that effect foreign exchange operations?
- Why operational risk is 'special'
- How these risks effect the bank
- The Model
- Managing operational risk
- Risk analysis
- Risk impact/frequency
- What are best practices?
- We explore how using these practices may also help to reduce the level of risk in the foreign exchange market more generally. How can these practices help reduce operational costs?
- What are the major trends in the foreign exchange market today and how will they foreign exchange operational risk
- Management's role in effective risk mitigation.
- Why operational risk is 'special'.
- What are the risks?
- The best practices used to mitigate these risks.
- Know your customer, Documentation requirements, Master netting agreements, Agreement on trading and operational practices.
- Trade capture
- Online settlement netting systems, Bilateral net amounts, Cut-offs for netting, Consistent operational practices and documentation.
- Real-time nostro balance projections, Electronic messages for expected receipts, Cancellation and amendment facilities, Payment failures, Thee settlement process and settlement exposure, Crisis situations outside your organization.
- Nostro account reconciliation, Identify non-receipt of payments, Operational standards for nostro account users.
- General Ledger reconciliation, Daily position and Profit & Loss reconciliation, Daily position valuation, Trade prices for Off-Market Rates.
- General Best Practices for Managing Foreign Exchange Operations Risk
- Segregation of duties, Business and operational roles, Understand operational risks, Procedures for introducing new products, new customer types, or new trading strategies, Control system access, Audit/risk control groups, Operational performance measures, Outsourcing & industry standards and best practices, Record keeping, Contingency plans
Richard holds a B.S. in International Business Administration from San Jose State University in California. His professional experience spans 19 years, 5 of which were spent with Wells Fargo Bank. Another 5 were spent honing his global banking skills, when Richard was involved with International Trade Finance, Real Time Gross Settlement and Cross Border Banking. The past 9 years have been in the private and high-tech sectors providing high-level consulting services, business analysis, project management and training to a wide range of banking clientele across the globe.
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