A 2-day intensive course on Operational Risk Management & Mitigation – From assessment to implementation.

Register now and take advantage of our Early Bird price!

All too often institutions have seen operational risk as complying with regulatory requirements rather than a process which can contribute to the financial fortune of an organisation. Implementing an effective operational risk framework is a complex process which requires an in-depth understanding of the nature of risks involved and strategies to mitigate them. 

This 2 day practical course explores the best practice in operational risk management, at all stages, from assessment to implementation. You will gain tools to manage risk and to create environment where this function is perceived as a value added proposition increasing profitability and structural strength of an orgnisation.

Main topics covered include:  

• Risk management drivers
• Risk and Capital - An introduction to Basel I, II and III
• Managing operational risk in the context of Basel II 
• Setting up objectives, governance process and compliance requirements
• Measuring operational risk
• The COSO ERM framework
• Implementing operational risk policy and structure and designing controls
• Preparing for Black Swan events
• Scenario analysis for operational risk management planning
• Managing specific risk areas: Internal and external fraud, clients, products and business practices
• Case studies include: Société Générale and National Bank of Australia

By the end of this training you will: 

• Learn about the most effective strategies for managing operational risk
• Explore operational risk in the context of Basel II and beyond
• Gain the tools to implement operational risk management in  practice
• Explore through the case studies current best international practice 

Course Level: The course is designed for existing Risk Management professionals, both beginners and intermediate, who want to enhance their risk management knowledge and skills.

Who Should Attend

From Commercial Banks, Central Banks, Investment Banks, Asset Management firms’ representatives, Pension Funds, Hedge Funds, Leasing companies, Insurance companies, Fund Managers, Other financial institutions 

• Financial Officers 
• Risk Officers 
• Internal Auditors 
• Operational Risk Managers 
• Staff with roles and responsibilities in operational risk in risk management departments, businesses and central departments

Teaching Method

This is a highly practical course with many real life case studies and exercises. Tutor will be focused on teaching practical strategies that can be taken back to your business and put into immediate effect.

• A short history of risk
• Dimension & drivers of risk management
• Business drivers
• Regulatory drivers
• Rating Agencies & risk
• Cross-border implications

Reviewing the Risk Types 

• How we categorize risks
• What is covered under Basel II?
• Risk categories
• Basel II risk coverage 
• Operational risk categorization
• The financial risk management environment
• The operational risk management environment 
• The technical Implications of operations risk management

• Capital in financial institutions
• The BIS capital standards 
• Basel’s three pillars 
• Basel’s operational risk options 
• Implementation considerations 
• Implementation of Basel II 
• The Pillar II maze 
• Implementation issues

Operational Risk & Basel II

• BIS standards for managing operational risk 
• Basic Indicator Approach (BIA) 
• Business Lines Approach 
• Advanced Measurement Approaches (AMA) 
• Loss event types 
• Criteria for the Advanced Measurement Approach  

• The governance process
• Setting risk management objectives 
• Building a risk culture
• Examples of a staff risk culture 
• Examples of management risk culture 
• Why are risk cultures important?
• Compliance requirements 
• Operational risk – definition and examples
• Enterprise Risk Management
• Key elements in managing operations risk
• A selection of case studies to illustrate the material covered
• The banking activity framework - the “Top-Down” approach of the BIS
• Main areas affected by  operational risk
• Key Risk Factors 

• Risk Analysis
• Determining the “Risk Appetite”
• Risk impact/Frequency 
• Impact vs. Probability 
• A generic case study 
• Measurement methods
• The Loss Modeling Method 
• The COSO ERM framework 
• Monte Carlo simulations
• Operational risk & bank strategy
• Quantitative  & Qualitative approaches
• Operational risk & the business cycle 
• Problems in identifying operational risks

The Black Swan 

• The challenges of outlier events for contingency planners
• Examining the nature of a Black Swan event
• Can two recent outlier events, the recent eruption of Iceland’s Eyjafjallajökull volcano and the Deepwater Horizon catastrophe be seen as black swan events? 
• Challenges for Planners, Strategists and CEOs
• How can you mitigate a Black Swan event?
• Blind Spots in planning

Managing Operations Risk under Basel 

• Basel Standards
• Basel’s’ three approaches

Implementing Basel’s “Sound Practices for the Management and Supervision of Operational Risk”

• Part 1

Operations Risks - Practical Examples

• Internal Fraud
• External  Fraud
• Employment Practices and Workplace Safety
• Clients, Products & Business Practices
• Damage to Physical Assets
• Execution, Delivery & Process Management
• Business Disruption & System Failures 

Products & Operations Risk

• Case Study: The US Sub-Prime Mortgage Crisis

The 2008 Global financial crisis was triggered by the Sub-Prime Mortgage problem in the United States.

This case study clearly illustrates how insufficient or total lack of attention to Operations Risk in the detail and stress testing of the Mortgage Product, its various derivatives as well as the processes and operations led to financial meltdown across the globe.  

Methods for Managing Operations Risk 

• Assessment methods
• Loss data collection (internal & external)
• Using loss data 
• Scenario analysis
• Using realistic scenarios
• Statistical techniques
• Problems and issues in assessing & managing operational risk
  

The Risk Management Process - A 'how to' guide

• Environmental survey
• Technology inventory
• Identifying & assessing the operational risks (including an illustrative operations risk management plan)
• Minimum control requirements
• Risk identification tools
• Control & mitigation of specific operational risks
• Establishing a framework of formal, written policies and procedures

• National Australia Bank
• Société Générale

_______________________________________________________________

18 - 19 June 2012 London 

Early Bird price until 30 of Mar £1795 + VAT