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London, Europe, USA East Coast
CPEs: 24
Instructor: Dennis Cox
Level: Intermediate
Tuition: £2,495.00
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NEW Operational Risk & the Revised Standardised Approach RM110

Location: London, Europe, USA East Coast

First Date: Sep 20 - 22 2021

Duration: 3 days/24 hours

Programme Director: Dennis Cox

All Dates & Locations
Venue Details

Experience the highly-interactive expert-led social learning through Virtual Classroom via Cisco WebEx from Risk Reward.

All our 2021 Virtual Classroom events feature shared (or discrete) live chat between delegates and the expert, participate in topical surveys, polling questions, group exercises and case studies for a tried -and- true engaging and gratifying learning experience.

"Excellent course. I learned a great deal and Dennis did a great job adapting to the on-line delivery method for the course. "
Federal Bank Examiner, USA
Agenda Highlights

Session 1:  Background and Timetable

Session 2:  Components of the Standardised Approach

Session 3:  Minimum Standards for the use of Loss Data under the Standardised Approach

Session 4:  Detailed Loss Event Classification

Session 5:  Information to be Collected on Operational Losses

Session 6:  Specific Criteria on Loss Data Identification, Collection and Treatment

Session 7:  Exclusion of Losses from the Loss Component

Session 8:  Exclusions of Divested Activities from the Business Indicator

Session 9:  Inclusion of Losses and BI Items related to Mergers and Acquisitions

Session 10:  Disclosure

Session 11:  The Implementation Project

Session 12:  The Standardised Calculation and Operational Risk Management

"Dennis was well prepared, knowledgeable and very enjoyable."
Bank Internal Auditor, US Bank, Virginia
Overview

Basel 3 introduced changes to the way that operational risk capital is to be calculated for all banks.

The previous three versions of the capital calculation are to be replaced by only one calculation known as the revised standardised approach.

Whereas the Basel 2 version of the standardised approach relied upon the use of simple income-based measures, the revised standardised capital calculation takes a rather different approach.  This is both relatively complex and also is likely to create additional challenges both in terms of operational risk management and also operational risk reporting.

This course takes delegates progressively through these new requirements and considers the key changes that banks will need to make to their systems and data analysis to meet these new obligations.  It also addresses the important issues of the relationship of the capital calculation to operational risk management and what is the impact on other relevant issues including internal loss data collation, risk appetite modelling and stress testing.

"The instructor was very knowledgeable about the subject matter and presented in a manner to keep everyone's attention."
Operational Risk Manager, Commercial Bank, Cyprus
Who Should Attend

Designed primarily for operational risk management and finance/capital management staff and management within banks, delegates from internal control, internal audit, regulatory reporting and executive management will also benefit from this regulatory update and  its impact course.

Additional Course Information

What Does It Cover?

Background and Change Timetable

 Why was a change considered necessary?

  • What is the impact on the previous approaches?
  • The timetable
  • Basic requirements
  • Revised definitions
  • BI (Business Indicator)
    • Interest, lease and dividend analysis
    • Services analysis
    • Financial analysis
  • Items excluded from the BI analysis
  • Application with a Group
  • BIC (Business Indicator Component)
  • ILM (Internal Loss Mutiplier)
  • The operational risk capital calculation

Components of the Standardised Approach 

  • Business Indicator (BI)
  • Interest, leases and dividend component (ILDC)
  • Services component (SC)
  • Financial component (FC)
  • The calculation
  • Impact of operational loss experience
  • Bucket 1 banks

Minimum Standards for the use of Loss Data under the Standardised Approach

  • Size criteria
  • General criteria on loss data identification
  • Observation period
  • Linking to current operations
  • Risk management and operational risk capital
  • Calculation of average losses

Detailed Loss Event Classification

  • Internal fraud
  • External fraud
  • Employment practices and workplace safety
  • Clients, products and business practices
  • Damage to physical assets
  • Business disruption and systems failures
  • Execution, delivery and process management
  • Comprehensive by nature
  • Outsourced activities and linkage to operational resilience
  • Exchange rates
  • Minimum threshold

Information to be Collected on Operational Losses

  • Date of occurrence
  • Date of discovery
  • Date of accounting
  • Recoveries
  • Causal drivers
  • Boundary with credit risk
  • Boundary with market risk

Specific Criteria on Loss Data Identification, Collection and Treatment

  • Policies and procedures
  • Gross loss definition
  • Recovery definition
  • Gross or net
  • Items included in gross loss computation
  • Pending losses
  • Timing losses
  • Charge offs
  • Overbilling and reversals
  • Items excluded
  • Allocation to year
  • Grouping losses

Exclusion of Losses from the Loss Component

  • Relevance
  • Justification
  • Lack of similar exposures
  • Impact of change in benchmark rates
  • Disclosure
  • Materiality threshold

Exclusions of Divested Activities from the Business Indicator

  • Supervisory process
  • Disclosure

Inclusion of Losses and BI Items related to Mergers and Acquisitions

  • Obtaining 10 years of loss data
  • Obtaining 3 years of BI data

Disclosure 

The Implementation Project 

  • Developing the plan
  • Dealing with the data
  • Undertaking the analysis
  • Appreciating systems issues
  • Identifying reporting requirements

The Standardised Calculation and Operational Risk Management

  • What are the problems with the calculation
  • Does it come up with a sensible number?
  • How will this impact operational risk management?
  • What is the role of risk and control self-assessment
  • Where does stress testing and scenario modelling fit in?
  • How does this relate to risk appetite modelling?
  • What should banks do to gain value from this exercise?

 

 

Learning Objectives

All delegates completing the course will receive a personalised, dated Risk Reward CPD accredited Certificate in Operational Risk & the Revised Standardised Approach.

Delegates will gain specialist knowledge relating to the issues surrounding the implementation of these changing rules

  • The key components of the approach
  • The Business Indicator analysis
  • The interest, leases and dividend, services and financial components and how to calculate them
  • What these will mean for a bank
  • The internal loss data analysis
  • The information to be collected
  • The implementation project
  • What this means for operational risk management

A Tier 1 Global banker, risk and audit expert will led delegates through hands-on practical cases studies to re-enforce learning and applications to address the impact of new regulation in the workplace.

 

Social Learning & Methods

Highly interactive expert-led intensive presentation, Q&A, group real-time in-depth case studies, regulation and discussion supported by key principles and theory. The virtual learning platform uses safe, industry preferred encrypted Cisco WebEx to optimize live face-to-face visual interaction, discrete chat, for polling and quizzes.

(An invitation via email with access link is included for all participants.)

Registration

NEW Operational Risk & the Revised Standardised Approach

Course Fee

Early Bird Discounts of 10% available by July 15, 2020

Course Fee (per person):
GBP £2,495.00 (+ UK VAT when applicable)

Number of delegates:

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