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• Operational Risk Management: Basel II Compliance
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Risk Management and Basel II: Best Practices Training Course

This training course cuts through the maze of provisions contained in the new Basel II Accord to give you the practical implications of the new framework on pricing, deal structuring, profitability and ultimately, competitiveness.

Risk Management & Basel II training course overview

The new Basel II framework, which is being adopted by a rapidly increasing number of banks in the United States, provides banks with a best practice tool to align pricing, capital and risk.

This training course cuts through the maze of provisions contained in the new Basel II Accord to extract the practical implications of the new framework on pricing, deal structuring, profitability and ultimately, competitiveness.

The primary focus is on Credit Risk but the new Market Risk and Operational Risk Frameworks are also reviewed.

Have a question? Email us at: or call us at: (+852) 2273-4393

Why should you attend this course?

By attending this course, you will gain an understanding of:

• The objectives of the Basel II Accord and how it seeks to achieve them
• The concept of Economic capital, Expected and Unexpected Losses.
• The concept of RAROC/RORAC and its impact on pricing, business decisions and (active) credit portfolio management
• The Three Pillars approach and how the pillars interact.
• The capital requirements for Credit, Market and Operational risk.
• Credit risk mitigation and how it impacts capital requirements and returns.
• The concept of ICAAP in Pillar II.
• The practical implications of the new Accord in terms of pricing and profitability of business lines and individual transactions.
• The 3 Operational risk measurement methods

Risk Management & Basel II Course Agenda

DAY ONE

Background to Basel II:

The Basel I Accord

• Background and scope
• Mechanics-definition of capital, provisions & risk weights
• Risk weight, Credit Conversion Factors and Return On Equity.
• Success and limitations.

Credit Risk management practices at best practice banks.

• Internal Credit Ratings
• Economic capital
• Expected and Unexpected losses
• Rorac /Raroc concepts
• Pricing as a credit issue
• Credit models: KMV Moody's, CreditRisk+ and CreditMetrics.
• Credit portfolio management.

The Basel II Accord

• Objectives and how the Accord seeks to achieve them
• Credit and Operational Risk vs. other risks
• The three pillars system
• The three approaches to capital allocation
• Bank supervision
• Market discipline
• Definition of Capital and Provisions

1. Credit Risk

The First Pillar- Minimum Capital Requirements

• Analysis of the two Approaches: Standardized and Advanced
• The Standardized Approach
  • New Risk Weights
  • External Ratings
  • Credit Risk Mitigation Techniques
• The Advanced Approach
  • The Risk Weight Function, PD, LGD and EAD.
  • Requirements for PD, LGD and EAD calculation
  • Different methods of PD calculation- Actuarial/Pooled Data/Merton
• Rules for Sovereigns, Banks and Corporates
• Rules for Retail
• Practical implications for business lines, capital allocation & pricing of transactions
• Case studies- calculation of capital requirements, pricing and returns under the Standardized and the Advanced Approaches.

DAY TWO

Credit Risk Mitigation

• The use of guarantees, credit derivatives and collateral under the two Approaches
• What has changed? Impact on deal structuring
• Case studies: Structuring deals to achieve capital relief and maximize returns

Special Credit Exposures

• Specialised lending sub-classes
  • Project finance
  • Object finance
  • Commodities finance
  • Income producing real estate
  • High volatility commercial real estate
• Rules for Equity Exposures
• Rules for purchased receivables
• Rules for Securitizations

Credit Risk Capital requirements for OTC derivatives

• Add-ons, VaR and IMM methods
• Case studies: capital requirements for OTC derivatives, including credit derivatives.

2. Market Risk

• Banking book and trading book.
• Changes to the 1996 Amendment for Market Risk
• The Standardised Measurement Method and VaR method
• Proposed changes in the light of the Credit Crisis.

3. Operational Risk

• Definitions
• The three approaches
• Basel II requirements for the Standardised Approach
• Basel II requirements for the AMA (Advanced Measurement Approach)
• Expected and Unexpected losses
• Operational risk events
• The role of Key risk scenarios
• Mapping operational risk
• Link between Operational risk and Economic capital
• How can the level of capital be influenced?
• Tests for satisfying the Regulator
• Case studies

Who should attend?

• Auditors
• Credit analysts
• Credit committee members
• Risk management staff
• Operations managers
• Corporate bankers
• Relationship managers
• Structured finance transactors
• Analysts of stock broking firms
• Financial institution units' staff

Pre-requisites

Understanding of basic banking products and accounting concepts

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Have a question? Email us at: or call us at: (+852) 2273-4393

What do you get from Ethan Hathaway courses?

• Practical. Learn from experienced and active industry practitioners and what's being practiced by your peers.
• Applicable. Apply what you learn in your job and your career
• Specially designed courses by industry active experts for industry practitioners
• Valuable. Earn more revenue or save your organisation from monetary loss. You and your organisation will quickly earn back your investment on the course fee and more
• Enjoyable. Speakers who have a passion for their topic
• Clear. Turning complex concepts into easy to understand concepts
• You gain knowledge and skills that make you valuable to your company and your career
• Instruction by industry experts
• Course notes and reference materials package
• Daily lunch, snacks and refreshments
• Certificate of completion
• Meeting your industry peers
• Ask questions relevant to your job
• Limited seats - each session is limited to between 18-25 seats
• Much, much more
• Download the course brochure to learn more

Your course instructor

Jean-Charles Pirlet: Jean-Charles spent seven years in the Credit, Corporate and Investment Banking divisions of Citibank, including four years in South Africa and three years in the World Corporation Group in London as Vice-President managing a portfolio of UK multinationals on a worldwide basis.

He subsequently worked as Director of Project Finance and Acquisition Financing for Security Pacific in Frankfurt before returning to South Africa in 1993. As Head of Corporate Banking (Senior Vice-President) for the local operation of ABN-Amro, Jean- Charles and his team were voted "Best Corporate bank in South-Africa" in the 1997 PriceWaterhouseCoopers survey. He now consults and trains in the fields of corporate finance, corporate banking and credit risk management, including Basel II.

Jean-Charles has broad credit experience gained over 20 years as credit analyst, credit officer and credit committee member at Citibank and ABN-Amro, covering Corporate Banking, Financial Institutions, Structured finance, Leveraged transactions, Asset securitisation and Derivatives.

Jean-Charles trains on high level financial courses such as Credit analysis, Credit Risk management, Financial Institutions and Basel II. He trains organisations such as Royal Bank of Scotland, CIBC, Barclays, Investec, Algorithmics and Shell Africa.

He holds an LLB and an LLM in Tax Law from the University of Liege in Belgium.

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Dates & Locations & Fees

Date	Location	Venue	Course Fee	Early Bird Fee	Register
3 Jun - 4 Jun, 2010	Kuala Lumpur, Malaysia	TBA	US$2898	See Brochure
19 Aug - 20 Aug, 2010	HK, Hong Kong	Marco Polo Prince Hotel	US$2898	See Brochure
8 Nov - 9 Nov, 2010	SG, Singapore	Marina Mandarin Hotel	US$2898	See Brochure

Early Birds Save Up To 30% Off the Regular Fee, download the brochure to learn more

Limited seats - Email us: for availability.

* Venue, dates, course fees, promotions, course content, course instructor are all subject to change

Can't find a session in a city near you?

If there's no session scheduled in a city near you, you have the following options:

• In-house training: If you have a group of 8 or more, consider having us run this course in-house for you
• Co-sponsored training: Between 5-7 people, consider a co-sponsored course - you agree to send this set number of people to the course if we run it in a city near you and Ethan Hathaway sells the remaining seats to other companies
• Distance learning: Less than 5 people, consider distance training format: live trainer presents over phone lines/web at pre-scheduled times (available only for select courses)
• Just tell us where you want the course: Let us know which city you'd like us to run this course in - we'll plan it if there's enough demand

Email us at: for more information regarding the above options.

Register for the course

You may book your place on the course by any of these methods:

1. Online booking - simply click on the "Register Me" button next to the course date you wish to register and it will take you through our quick online registration procedure.
2. Email us at: - please include your full contact details.
3. Fax us the booking form (included in the brochure) to: +852 3014-0721
4. Or call: +852 2273-4393 during normal office hours

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Related Courses

• Operational Risk Management: Basel II Compliance
• Corporate Credit Analysis & Risk Management
• Advanced Operational Risk Management
• Risk Management School

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Learn more about this course

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