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Becoming a Financial Risk ManagerUsing the FRM to Build andAdvance Your Career
William MaySenior Vice PresidentFRM Program Manager
Global Association of Risk ProfessionalsSeptember 2011
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Emergence of the Risk Management Profession
Risk management profession only loosely existed 20 years ago Drivers of risk management as a profession
Notable risk management failures Orange County, LTCM, Barings, Socit Gnrale, Credit crisis
Financial innovation Growth in use and availability of derivatives 80s and beyond
Risk measurement techniques Late 80s early 90s JP Morgan developed Value-at-Risk to quantify expected loss
Computational power Ability to gather position data and measure risk in a timely manner
Best practice recommendations Group of 30 report
Regulatory Initiatives International Basel I, II, III
National Sox, Dodd-Frank, FSA, etc.
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Why would one consider becoming an FRM?
The risk management profession has seen considerable growth over the past 15years, fueled by the complexity of financial products, increased regulation, and
recent notable institutional failures. Like other career paths in finance, having an advanced degree and certification in
financial risk management helps to increase your career potential.
FRM holders have achieved positions such as Chief Risk Officer, Senior Risk Analyst, Head of Operational Risk, and Director, Investment Risk Management,to name a few.
Earning an FRM designation not only broadens your skill set, it demonstrates a
standardized level of industry knowledge, making you a recognized leader infinancial risk management.
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Financial Risk Management Skills are in High Demand
Demand for financial risk managers is strong
Source: Indeed.com And is expected to remain strong
Risk Management ranked #14 in the CNN Money and PayScale.coms 2010 list of top100 careers with great pay and growth prospects, expecting 10-year job growth of 24%.Source CNN Money
http://www.indeed.com/jobtrends?q=financial+risk+management&relative=1http://money.cnn.com/magazines/moneymag/bestjobs/2010/full_list/index.htmlhttp://money.cnn.com/magazines/moneymag/bestjobs/2010/full_list/index.htmlhttp://www.indeed.com/jobtrends?q=financial+risk+management&relative=17/31/2019 Frm Overview
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GARP and the FRM
As the leading professional association for risk managers, GARP's mission is to advance the risk profession through education, training
and the promotion of best practices globally.
Not-for-profit association, founded in 1996 Over 150,000 members from 195 countries and territories Governed by Board of Trustees comprised of leading risk executives and
researchers Offices in Jersey City, NJ and London
Financial Risk Manager (FRM) Leading global professional designation program for risk management Administered by GARP since 1997 Program objective assess an individuals ability to measure and manage risk
in a real-world environment FRM Committee comprised of senior risk managers and researchers oversee
program
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2011 FRM Committee
Dr. Ren Stulz (Chairman) Everett D. Reese Chair of Banking and Monetary Economics, Ohio State University
Rich Apostolik President and Chief Executive Officer, GARP
Richard Brandt Risk Oversight, Citibank
Juan Carlos Garcia Cespedes Head of Risk Methodologies, BBVADr. Chris Donohue Managing Director, Head of GARP Research Center
Herv Geny Global Head of Risk, ICAP
Dr. Satyajit Karnik, FRM Fordham University
Kai Leifert, FRM Regional CRO, Northern Trust Global Investments
Steve Lerit Senior Vice President, Bank of AmericaWilliam May Senior Vice President, GARP Research Center
Michelle McCarthy Managing Director, Director of Risk Management, Nuveen Investments
Michael B. Miller, FRM Head of Risk Management, Tremblant Capital Group
Ezra Uzi Moualem, FRM Vice President, The Financial Institute of Israel & Managing Director, ZRisk
Dr. Victor Ng Vice President, Head of Risk Modeling - Firmwide Risk, Goldman SachsDr. Elliot Noma Managing Director, Garrett Asset Management
Liu Ruixia Deputy General Manager, Risk Management, Industrial and Commercial Bank of China
Robert Scanlon Group Chief Credit Officer, Standard Chartered Bank
Dr. Til Schuermann Partner, Oliver Wyman
Serge Sverdlov Senior Quantitative Manager, Microsoft CorporationAlan Weindorf Treasury, Visa
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The FRM Program
Two-part program Part I curriculum covers the tools used to assess risk
Foundations of Risk Management (20%) Quantitative Analysis (20%) Financial Markets and Products (30%) Valuation and Risk Models (30%)
Part II curriculum focuses on the practical application of those tools Market Risk Measurement and Management (25%) Credit Risk Measurement and Management (25%) Operational and Integrated Risk Management (25%) Risk Management in Investment Management (15%)
Current Issues in Financial Markets (10%)
Part II Exam(4 hours, 80 MCQ)
Part I Exam(4 hours, 100 MCQ)
Demonstrate two
years relevantwork experience
Certified
Financial RiskManager (FRM )
VoluntaryContinuingEducation40 hours/2 years
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FRM Registrations
Growth of the FRM Program
Average growth of 34% in registered candidates per year since 2000
2010 registrations represent over 4,447 firms globally
Exams offered in 92 locations around the world in 2010 Registrants come from every major financial institution, consulting
firm, regulatory body, and academic institution
100,000 th FRM candidate registered for the November 2010 exam
Currently, there are over 20,000 Certified FRMs
Full Exam 37.0% 42.9% 54.0% 53.3% 62.7% 58.9% 53.8% 52.5% 44.0% 44.8% 44.4% 42.4% 44.1%
Part I
55.2% 52.5% 39.3%
Part II 54.0% 54.9%
Pass Rate
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Acceptance of the FRM Program
Represent every major banking institution,government regulator, consulting firm and financialservices institution around the world
Average annual growth of 30%
646 organizations have five or more FRM Candidates Top 20 companies with the most FRM Holders
http://www.google.com/imgres?imgurl=http://ceoworld.biz/ceo/wp-content/uploads/2009/08/ubs-logo.jpg&imgrefurl=http://ceoworld.biz/ceo/tag/swiss-bank&usg=__-SSzuyZuyNqwKax2gYqbmyTHbxU=&h=448&w=1172&sz=101&hl=en&start=1&sig2=yMSSBSvPBSf7NiLCRbS9JQ&itbs=1&tbnid=WgPC0HYrE_P8CM:&tbnh=57&tbnw=150&prev=/images?q=ubs+logo&hl=en&tbs=isch:1&ei=9h5cTOm_FMH-8Aam8IDzAQhttp://en.wikipedia.org/wiki/File:Bank_of_Communications_logo.pnghttp://dealbreaker.com/2009/06/03/BBVA%20logo.jpghttp://www.google.com/imgres?imgurl=http://www.kensoftnet.com/images/icici_logo.jpg&imgrefurl=http://joran-addis.hostlogarea.in/100626/&h=114&w=346&sz=7&tbnid=RFeBxd1NZa98cM:&tbnh=40&tbnw=120&prev=/images?q=icici+logo&usg=__eSM7Ibv5n3CVfEwvz3SQ-kfR47g=&sa=X&ei=fxtcTIK4IcG88gaDn_XhAQ&ved=0CBoQ9QEwAghttp://www.google.com/imgres?imgurl=http://www.quickmortgageapprovals.ca/images/stories/ING_Logo.gif&imgrefurl=http://www.quickmortgageapprovals.ca/lending-partners/bank/ing-direct.html&usg=__eimYpKBQNRj5A6xpDcOsthf7ylM=&h=299&w=1204&sz=15&hl=en&start=1&sig2=5wfVwc-pYkp7gl120Vf6vQ&itbs=1&tbnid=w0ktS_G2BegbXM:&tbnh=37&tbnw=150&prev=/images?q=ing+logo&hl=en&tbs=isch:1&ei=Bx9cTMfPC4L68Aa40qT2AQhttp://www.google.com/imgres?imgurl=http://www.digitalezorg.nl/nen7510/onderhoud/userfiles/Image/Deloitte_logo.jpg&imgrefurl=http://picsdigger.com/keyword/deloitte%20logo/&h=295&w=1578&sz=134&tbnid=Fl8r-94vyF8q1M:&tbnh=28&tbnw=150&prev=/images?q=deloitte+logo&zoom=1&q=deloitte+logo&usg=__O38yfANG_vJfuw8-EHSsK2zkS4k=&sa=X&ei=BNC9TJayJcP_lgex-YXmBw&ved=0CBoQ9QEwAghttp://www.google.com/imgres?imgurl=http://www.moldex3d.com/jla/en/images/stories/Success/Samsung/samsung-logo.jpg&imgrefurl=http://www.moldex3d.com/jla/en/index.php?option=com_content&task=blogcategory&id=93&Itemid=141&h=350&w=1048&sz=18&tbnid=rKGYtoQxBCy1CM:&tbnh=50&tbnw=150&prev=/images?q=samsung+logo&zoom=1&q=samsung+logo&usg=__-kr55rjJMLdawsB8btbpOEVWftU=&sa=X&ei=0M-9TKHwKYSdlgevjenjBw&ved=0CBgQ9QEwAQhttp://en.wikipedia.org/wiki/File:Agricultural_Bank_of_China_logo.PNGhttp://www.google.com/imgres?imgurl=http://www.goodlogo.com/images/logos/jp_morgan_chase_logo_2723.gif&imgrefurl=http://www.goodlogo.com/extended.info/2723&h=100&w=400&sz=3&tbnid=O65XkN96Hbyv-M:&tbnh=31&tbnw=124&prev=/images?q=jp+morgan+chase+logo&usg=__AA3w8e4pqktk4_tlfoUE9zJ8x1k=&sa=X&ei=JRtcTMPUDMH88Ab_p8SDAg&ved=0CB8Q9QEwAwhttp://www.google.com/imgres?imgurl=http://www.cambridgefutures.com/images/Ersnt_and_Young_logo.jpg&imgrefurl=http://www.cambridgefutures.com/ernst-young-c86.html&h=150&w=210&sz=36&tbnid=2BwYVLkEUOAorM:&tbnh=76&tbnw=106&prev=/images?q=ernst+&+young+logo&usg=__jUiUMLoRLdN7Yh_YkbnegNTwSlc=&sa=X&ei=DhtcTMuGIsT68Aa1kti8Ag&ved=0CBkQ9QEwAAhttp://www.google.com/imgres?imgurl=http://events.powersevents.com/img/clientgr/302463094_citigroup-logo.jpg&imgrefurl=http://events.powersevents.com/cgi/public.cgi?table=facility&event_id=30246&h=338&w=525&sz=55&tbnid=aauKKV-xq_cWxM:&tbnh=85&tbnw=132&prev=/images?q=citigroup+logo&usg=__VlWZmNNPAr0iTlOLZoDd9xl7cUs=&sa=X&ei=oRpcTI78OcH-8Aa0w93XAg&ved=0CBYQ9QEwAAhttp://www.google.com/imgres?imgurl=http://www.chinalink.org.uk/img/logo%20Bank-of-China.gif&imgrefurl=http://www.chinalink.org.uk/0502CBCCulture.htm&h=199&w=569&sz=15&tbnid=BCIFKa-APweQjM:&tbnh=47&tbnw=134&prev=/images?q=bank+of+china+logo&usg=__CcWwZmIkQ6zesKYB71hmtrMLFXY=&sa=X&ei=YBpcTJvtGMH78AaC7tnaAg&ved=0CBwQ9QEwAwhttp://www.google.com/imgres?imgurl=http://www.kktcogs.com/tr/images/ref/hsbc_logo.gif&imgrefurl=http://www.kktcogs.com/tr/&h=248&w=864&sz=26&tbnid=K70JmwTdAoQlfM:&tbnh=42&tbnw=145&prev=/images?q=hsbc+logo&usg=__qGpBwI31U11oEJwyR36J4xEh8kY=&sa=X&ei=4hhcTKqZHIL78AbZkfjvAg&ved=0CBoQ9QEwAg7/31/2019 Frm Overview
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Global Participation in the FRM Program
Significant growth throughout the world since 2007
0%
50%
100%
150%
200%
250%
300%
350%FRM Registration Growth Since 2007
2010
2011 (Projected)
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Diversity of FRM Candidates
Distribution of FRM Candidates May 2011
Banking
Financial Services (non-bank)
AcademicRisk & Technology Vendors
Consulting
Insurance
Other
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Strengthening the FRM Program
FRM Part I Books with Pearson Available this month (May 2011)
Global Job Task Analysis A formal study of the current knowledge, skill and
abilities required to perform the job of financialrisk manager globally
To validate the appropriateness of the current FRMexamination and to guide the design of future FRMprogram
University Partnerships
Working with universities globally to develop andenhance risk curricula and to directly embed theFRM examination into academic programs
Continuing Professional Education
Launched in late 2010
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The FRM Exam Process
Outlines topics andreadings for Part 1 andPart 2 Exams
Developed annually byFRM Committee
Insight from CertifiedFRMs and risk community
Download2011 FRM
Study Guide
Register on GARPwebsite:www.garp.org/frm
Leverage candidateresources, includingpractice exams, books,course packs, FRMtraining providers(more later)
RegisterAnd
Prepare
Developed with inputfrom FRM Committee,certified FRMs andother risk professionals
4 Hour exam, 100Multiple ChoiceQuestions
November 19, 2011,Morning Session
Sit for Part 1Exam
Developed with inputfrom FRM Committee,certified FRMs andother risk professionals
4 Hour exam, 80Multiple ChoiceQuestions
November 19, 2011,Afternoon Session
Sit for Part 2Exam
http://www.garp.org/frmhttp://www.garp.org/frm7/31/2019 Frm Overview
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FRM Registration Timeline and Fees
Program Enrollment and Exam Registration Fee
Part I Part IIProgram Enrollment Fee (valid for 4 years) USD 300
June 1, 2011 July 31, 2011 USD 350 USD 350
August 1, 2011 August 31, 2011 USD 475 USD 475
September 1, 2011 October 15, 2011 USD 650 USD 650
Enrollment fee includes 1-year complimentary GARP membership Candidates can elect to take both Part I and Part II in November
However, candidate must pass Part I to have Part II exam scored Deferral policy Questions? Contact [email protected]
mailto:[email protected]:[email protected]7/31/2019 Frm Overview
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November 2011 FRM Exam Sites
Africa Jordan, Amman USA, California, San Francisco Germany, MunichKenya, Nairobi Korea, Seoul USA, Colorado, Denver Iceland, Reykjavik Nigeria, Lagos Kuwait, Safat USA, D.C., Washington Ireland, DublinSouth Africa, Cape Town Lebanon, Beirut USA, Florida, Tampa Italy, Milan
South Africa, Johannesburg Malaysia, Kuala Lumpur USA, Georgia, Atlanta LuxembourgSouth Africa, Vanderbijlpark Oman, Muscat USA, Illinois, Chicago Poland, Warsaw
Pakistan, Karachi USA, Louisiana, New Orleans Russian Federation, MoscowAsia Philippines, Manila USA, Massachusetts, Waltham Spain, BarcelonaChina, Beijing Saudi Arabia, Riyadh USA, Michigan, Ann Arbor Spain, MadridChina, Chengdu Singapore USA, New York, New York Sweden, StockholmChina, Guangzhou Taiwan, Taipei USA, NJ, New Brunswick Switzerland, GenevaChina, Hong Kong Thailand, Bangkok USA, North Carolina, Charlotte Switzerland, ZurichChina, Nanjing United Arab Emirates, Dubai USA, Ohio, Columbus The Netherlands, AmsterdamChina, Shanghai USA, Pennsylvania, Philadelphia The Netherlands, UtrechtChina, Wuhan Americas USA, Texas, Dallas Turkey, IstanbulIndia, Bangalore Bermuda, Paget USA, Texas, Houston Ukraine, KievIndia, Calicut, Kerala Brazil, Sao Paulo USA, Washington, Seattle UK, England, London
India, Chennai Canada, BC, Surrey UK, Scotland, EdinburghIndia, Hyderabad Canada, Ontario, Toronto EuropeIndia, Kolkata Canada, Quebec, Montreal Austria, Vienna OceaniaIndia, Mumbai Honduras, Tegucigalpa Belgium, Brussels Australia, MelbourneIndia, New Delhi West Indies, Jamaica Bulgaria, Sofia Australia, SydneyIndonesia, Jakarta Mexico, Mexico City Czech Republic, Prague New Zealand, AucklandIsrael, Tel Aviv (Sunday) Peru, Lima France, ParisJapan, Tokyo USA, California, Los Angeles Germany, Frankfurt
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FRM Candidate Resources
2011 FRM Study Guide (Free) 2011 FRM AIMS (Free) 2011 FRM Practice Exams (Free) 2011 FRM Part 1 Books ($250 + shipping) 2011 FRM Part 2 Course Pack
($370 + shipping) FRM Handbook ($122.50 + shipping) FRM Training Course Providers Local Study Groups
GARP Website GARP Chapters
Social Media: LinkedIn, Facebook
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Academic Outreach
35 chapters in 17 countries (from Cornell to Kenya and back again)
University Chapters give students a forum through which they can learn,
communicate their ideas, and network with their peers and practitioners Participation in University Chapter meetings gives students the chance to:
Better understand professional life and what to expect in the workplace
Be better equipped for the career opportunities that lie ahead for them in the risk
management community University Chapters give the practitioner community a forum to interact with and
inform the academic community about relevant trends and issues in riskmanagement
Partnership for Risk Education
University Chapter Network
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Q & A
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Creating a culture ofrisk awareness TM
Global Association ofRisk Professionals
111 Town Square PlaceSuite 1215Jersey City, New Jersey 07310USA+ 1 201.719.7210
Minster House, 1st Floor42 Mincing LaneLondon EC3R 7AEUK+ 44 (0) 20 7397 9631
www.garp.org
2011 Global Association of Risk Professionals. All rights reserved.
About GARP | The Global Association of Risk Professionals (GARP) is a not-for-profit global membership organization dedicated to preparing professionals and organizations to make better informed risk decisions. Membership represents over 150,000 risk management practitioners and researchers from banks, investment management firms, government agencies,academic institutions, and corporations from more than 195 countries. GARP administers the Financial Risk Manager (FRM ) and the Energy Risk Professional (ERP ) exams; certifications recognized by risk professionals worldwide. GARP also helps advance the role of risk management via comprehensive professional education and training for professionals of all levels. www.garp.org.