INSTITUTE OF BANKING STUDIES
Website: www.kibs.edu.kw email: [email protected]
Ibselearning: wwwibselearning.com email: [email protected]
Accredited by:
2 Risk Management Certificate (RMC)
N.G
Risk Management
is a Process of Taking
Calculated Risks
not Avoiding Risks
"Carl Olsson, Global Risk Management, SCB"
3 Risk Management Certificate (RMC)
N.G
Risk Management Certificate
(RMC) G8 -2018 Index:
Title Page #
Program Objectives
4
Program Schedule
5
Outlines
Module I- Introduction to Risk Management
6
Module II Part 1 - Quantitative Methods, Market and
Liquidity Risk Management
7 -8
Module II Part 2 - Stress Test - ICAAP and Assets
Liabilities Risk Management
9 - 10
Module II Part 3 - Operational Risk
11 - 13
Module II Part 4 - Credit Risk
14 - 15
Module III - Islamic Banking Risk
16
Module IV - Supervision and Regulation Risk
17
e-learning Courses
18
Administration
19
4 Risk Management Certificate (RMC)
N.G
Risk Management Certificate (RMC)
Program Objectives
1 To understand the nature of risk, its sources and how it affects
banks/organizations
2 To familiarize participants with concepts, techniques and principles
of risk management
3 To develop risk thinking and apply knowledge to practical changes
within the banks/organizations
4 To provide the management with risk related information vital for
decision making
5 To learn about the different risks involved while managing
transactions
6 To gain a practical understanding of the Risks and Controls inherent
within Islamic Banking and Islamic products
7 To comply with rules and regulations, local and international,
applicable to risks management and assist all divisions bank-wide to
manage risks within their area
5 Risk Management Certificate (RMC)
N.G
PROGRAM SCHEDULE
Module
Parts
Dates
No. of
Hrs
Exam Dates/Time
I Introduction to Risk
Management
14 - 15 January 2018
8:00 am - 3:00 pm
Sunday - Wednesday
12 hrs 22 January 2018
2:00 - 3:00 pm
II
Part 1- Quantitative
Methods, Market and
Liquidity Risk
Management
4 - 12 February 2018
5:00 - 8:30 pm
Sunday - Wednesday
& Sunday - Monday
18 hrs 19 February 2018
2:00 - 3:30 pm
Part 2- Stress Test -
ICAAP and Assets
Liabilities Risk
Management
4 - 12 March 2018
5:00 - 8:30 pm
Sunday - Wednesday
& Sunday - Monday
18 hrs 19 March 2018
2:00 - 3:30 pm
Part 3-Operational Risk
25 March - 2 April, 2018
5:00 - 8:30 pm
Sunday - Wednesday
& Sunday - Monday
18 hrs 12 April 2018
2:00 - 3:30 pm
Part 4-Credit Risk
8 - 12 April 2018
8:00 am - 3:00 pm
Sunday - Thursday
30 hrs 23 April 2018
2:00 - 4:30 pm
III Islamic Banking Risk
29 April - 2 May, 2018
8:00 am - 3:00 pm
Sunday - Wednesday
24 hrs 8 May 2018
2:00 - 4:00 pm
IV Supervision and
Regulations Risk
6 - 8 May 2018
8:00 am - 3:00 pm
Sunday - Tuesday
18 hrs 14 May 2018
2:00 - 3:30 pm
Total
138 hrs
6 Risk Management Certificate (RMC)
N.G
Risk Management Certificate (RMC)
M I - Introduction to Risk Management
OBJECTIVE
To understand the nature of risks, its sources and how it affects banks/organizations.
CONTENTS
Introduction to Risk Management
Definition of risk
Types of risk
Development of risk management
Risk management framework
Lessons learnt
6 hrs
Basel Directives I
Basel Directives II
Standardized
Advanced
Basel III Proposal
Regulatory Capital Requirements
Regulatory capital under Basel I
Regulatory capital under Basel II
Regulatory capital under Basel III Proposal
Standardised approach
Foundation Internal Ratings Based Approach
Advanced Internal Ratings Based Approach
Basel II Risk Weight Functions
Basel Trading Book Issues
Counterparty credit exposure
Double default effects
Short term maturity adjustment
Unsettled trades
Wrong way risk
Central Bank of Kuwait Rules and Regulations, Policies
6 hrs
DURATION
7 Risk Management Certificate (RMC)
N.G
12 Hours
Risk Management Certificate (RMC)
M II - Part 1
Quantitative Methods, Market and Liquidity Risk Management
OBJECTIVE
To familiarize participants with concepts, techniques and principles of risk management in
specific areas.
To develop risk thinking and apply knowledge to practical changes within the
banks/organizations.
To learn about the different risks involved while managing transactions.
To provide the management with risk related information vital for decision making.
CONTENTS
Understanding Bank Financial Statements from Risk Management Prospective
Overview of Financial Crisis, Lessons learned and impact on Kuwait
Overview of Risk Management Structure and CBK Roles
Overview Risk Classification Approaches
Most applied Quantitative Methods for Risk Management
- Performance Evaluation
- Returns Attribution and Measuring
- Detecting Overestimating IRR
- Data Gathering and Sample Selection
- Measuring and Modeling Assets prices Volatilities
- Selecting Volatility Measures
- Common Return Distributions in Risk Modeling
- Confidence level and Fat Tail detecting for Hidden Risk
- Frequency Distribution for Modeling Probabilities
- Risk Adjusted Return Measures
- Measuring Portfolio Risk and Returns
- Modeling Beta , Covariance and Correlation
- Quantifying Concentration
- Modified Duration and PV01
- Excel Applications
Value at Risk Approaches
- Historical Simulation Methods
8 Risk Management Certificate (RMC)
N.G
- Analytical VAR
- Monte Carlo VAR
Foreign Currency Risk
- Relevant Economic Factors
- Value At Risk
- Mitigation Techniques
Interest Rate Risk Management
- Relevant Economic Factors
- Measuring and Modeling
- Value At Risk for Fixed Income Instruments
- Mitigation Techniques
Investment Risk Management
- Investment classification (Equity, RE, FI, Funds, Private Equity and VC)
- Relevant Risk factor per Class
- Pricing Risks
- Investment Performance and Economic Cycle
- Measuring and Modeling Risk Adjusted Return
- Value At Risk for Listed and Unlisted Equity Investment
- Assets Allocation and Capital Market Expectations
DURATION
18 Hours
9 Risk Management Certificate (RMC)
N.G
Risk Management Certificate (RMC)
M II - Part 2
Stress Test - ICAAP and Assets Liabilities Risk Management
OBJECTIVE
To familiarize participants with concepts, techniques and principles of risk management in
specific areas.
To develop risk thinking and apply knowledge to practical changes within the
banks/organizations.
To learn about the different risks involved while managing transactions.
To provide the management with risk related information vital for decision making.
CONTENTS
Review of Basel 2 and Basel 3
Financial derivative in Risk Management
- Futures and Forward contracts on FX, Equity and Commodities
- Options Strategies
- Swap Pricing
Liquidity Risk Management
- Market Liquidity Risk
- Funding Liquidity Risk
- Liquidity Coverage Ratio (LCR)
- Net Stable Funding Ratio (NFSR)
- Measuring Liquidity Risk: LAR, SAR, Skewness and Kurtosis
- Risk Mitigation Techniques
Balance sheet Risk Management (ALM)
- Maturity mismatching and liquidity gaps
- Assets and liability risk mismatching
- Economic factors and balance sheet growth
Introduction to ICAAP
- Concentration risk Capital Charge
- Investment capital charge
Introduction to Credit Risk Portfolio Modeling (for the purpose of understanding
ICAAP, Stress test & ALM)
- Understanding Probability Of Default (PD)
- Understanding Credit Risk Pricing
10 Risk Management Certificate (RMC)
N.G
Stress testing
- Scenario analysis
- Sensitivity analysis
- Factor push analysis
- Analysis of stress testing results
- Stress test Excel modeling
Risk Appetite and Risk Tolerance for Bank Risk Budgeting
- Determining the main objectives of risk budgeting
- Factors of risk appetite
- Factors of risk tolerance
- Rational decision taking
Country Risk Analysis
DURATION
18 Hours
11 Risk Management Certificate (RMC)
N.G
Risk Management Certificate (RMC)
M II - Part 3 - Operational Risk
OBJECTIVE
To familiarize participants with concepts, techniques and principles of risk management in
specific areas
To develop risk thinking and apply knowledge to practical changes within the
banks/organizations
To learn about the different risks involved while managing transactions
To provide the management with risk related information vital for decision making
CONTENTS What is Operational Risk?
Factors influencing the Importance of Operational Risk
Identifying and Classifying Operational Risk Categories Fraud
Systems and operations
Communication
Documentation
Analyzing Specific Risk
Electronic/Technology
Systems failure
Programming errors
Telecoms
People
Customers
Staff
Incompetence
Fraud
Process
Execution error
Booking error
Transaction and mis-matching of trades
Objectives of operational risk management
Responsibilities
- Developing a risk awareness culture
- Developing operational risk management procedures
- Operational risk management techniques
- Self assessment
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- Benchmarking
- Allocating operational risk costs
Anti Money Laundering
Measuring Operational Risk
- Industry best practice metrics
- Data analysis – statistical methodologies to sample transactions
- Capital allocation requirements under Basel II
Understanding the Risk Impact
- What is measured and how
- What not to measure
- The interpretation of information
- Capital allocation assumptions
- Capital adjustment policies
Stage 1 : Understanding how the Operational Risk environment might look
Systems map and assessment
Stage 2: Understanding the Operational Risk environment
Matching of people
Matching of systems
Assessing how the support function will work
Stage 3 : Living with the Operational risk environment
Getting systems to communicate and work in tandem
Living with multiple back-office and front-office systems
Living with multiple processes
Politics
Dealing with resentment, dismissals/ redundancies
Stage 4: Designing and building a better operational risk environment
Longer-term - integration and rationalisation
Process re-engineering and streamlining processes
Removing duplication
Straight Through Possessing projects
Systems design and end-user considerations
Single back office and front office
Overcoming resistance and introducing training strategies
Project planning, budgeting and communications
Assigning responsibility for risk policy
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Analysing a situation
Identifying potential risks
Identifying killer risks
Identifying the cause of the risk situations
Devising the recovery plan
Managing and Implementing the Operational Risk Management Policy
Generic Approaches
Do nothing
Insurance
Risk profiles mapping
MIS
Straight Through Processing (STP)
Processes and controls
Overcoming data incompatibility
Systems reconciliation
Soft Issues
Building risk awareness culture
Building consensus on risk allocation policies
Building sense of responsibility for risk reduction
Overcoming resistance to change and establishing clear, straight-through communication Channels
Corporate governance
Identifying and Tackling Line Management Issues
Assessing the level of senior management buy-in to operational risk solutions
Understanding reporting lines and roles/ responsibilities
Implementing effective management control
Empowerment and staff control
DURATION
18 Hours
14 Risk Management Certificate (RMC)
N.G
Risk Management Certificate (RMC)
M II - Part 4- Credit Risk
OBJECTIVE
To familiarize participants with concepts, techniques and principles of risk management in
specific areas.
To develop risk thinking and apply knowledge to practical changes within the
banks/organizations.
To learn about the different risks involved while managing transactions
To provide the management with risk related information vital for decision making
CONTENTS
Credit Risk Assessment
Financial
- Financial Analysis
- Cash Flow Analysis
Non Financial
- The Business
- The stakeholders
- The competition
Portfolio Management
Simple models of corporate structure and default processes
Credit risk as default probability, recovery rates and exposure
Ratings agents approach to credit risk Portfolio Credit Risk
Probability of default, loss given default and correlation of default
Credit risk of portfolios compared with single positions
Loss distributions and relationship to expected loss, worst credit loss, economic and
regulatory capital
Introduction to portfolio credit risk models
Optimising portfolios for best risk/return
Overview of Basic Statistics
Elementary statistics
- Volatility of market factors
- Covariance and correlation, correlation matrix
- Problems with real-world data
Managing Credit Risk: Securitisation and Risk Transformation
- Concepts of regulatory capital for credit risk and return on assets
- Techniques for moving risk off balance sheet
Securitisation and synthetic securitisation
CDOs and other tranche products
15 Risk Management Certificate (RMC)
N.G
Pros and cons of securitisation for origination firms and investors
Managing Credit Risk: Credit Derivatives and Risk Transfer
- What are credit derivatives and why are they used?
- Single name credit derivatives (unfunded and funded structures)
Credit default swap
Total return swap
First-to-default basket note
Pricing and risk of single obligor credit derivatives
Regulatory capital impacts of credit derivatives
Documentation and legal issues
Modeling Credit Exposure of Derivatives
- Loans and derivatives
- Transaction based models
- Foreign exchange transactions
- Interest rate swap transactions
- CEF calculations
- Effect of CMTM
- Market factor based models
- Counterparty exposure simulation models
- Handling credit exposure limits
- Integration of netting
- Integration of meeting
Evaluating the Credit Risk of Derivatives
- Expected and unexpected credit loss
- Default only versus economic loss
- Credit loss profile
- Simulation approach to economic capital
- Risk rating model
- Rating migration matrix
- Loss given default
Recent History
- "Bad Bank' experiences
- Troubled Asset Relief Program (TARP)
DURATION
30 Hours
16 Risk Management Certificate (RMC)
N.G
Risk Management Certificate (RMC)
M III - Islamic Banking Risk
OBJECTIVE
To gain a practical understanding of the Risks and Controls inherent within Islamic Banking
To know how to handle Islamic Products and risks associated with such products
CONTENTS
Islamic Banking Risk
Introduction to Islamic Banking Products
Types of Risks
Risk Management Frameworks
How specific risks affect Islamic Banking Instruments such as
- Musharaka
- Mudaraba
- Ijara
- Sukuk
- Takaful
- Salam 18 hrs
Miscellaneous Risk
Legal
Reputational
Environmental
Systematic 6 hrs
DURATION
24 Hours
17 Risk Management Certificate (RMC)
N.G
Risk Management Certificate (RMC)
M IV - Supervision and Regulations Risk
OBJECTIVE
To comply with rules and regulations, local and international, applicable to risks management
and assist all divisions bank-wide to manage risks within their area
CONTENTS
Supervision and Regulations of Risk
- Central Bank of Kuwait Rules and Regulations
- Stress Testing
Incremental transactions
Market discontinuity
Scenario analysis
General considerations
Assumptions sensitivity
Enterprise Wide Risk Management (EWRM)
Good Governance and Transparency
International Best Practices
- The role of the Risk Management Department
- The role of the Central Audit Department
- Working with external auditors
- Working with the Central Bank of Kuwait
DURATION
18 Hours
18 Risk Management Certificate (RMC)
N.G
List of e-learning Courses
Title
1- Performing Risk Analysis
2- Risk Management: Identifying Risk
3- Risk Management: Assessing Risk
4- Risk Management: Dealing with Risk
19 Risk Management Certificate (RMC)
N.G
Administration Target Audience
Eligibility for Admission Education : Graduates
Working Experience : Bank Employees with less than 1 year experience in Audit and
Risk areas
English Language : Fluency both written and oral communication
Bank’s Recommendation : The bank should recommend the candidate for the in Risk
Management Certificate Program
Duration The program will be conducted at the Institute of Banking Studies as per the attached schedule.
Exams Each Module will be subject to Examination. Pass mark 70% averaged across topic areas.
Progress Modules to each new level is dependent upon Exam success and meeting
all other criteria. In certain areas performance will be assessed by reviewing Exam results over more than
one Element within the four (4) Modules.
Attendance Attendance at every session is a pre-requisite of Certificate issue.
Punctuality Timeliness is essential
Attendance at every session of the in-class training courses is required.
3 late arrivals, or 3 absences in the training sessions in the Training Room, will be
recorded as absent for one day.
2 days absent during the entire Program and at the discretion of the IBS, the participant
will be required to leave the Program.
Reports Punctuality, participation, quality of input, initiative, teamwork, etc. will where appropriate, be
reported upon.
Language All Modules will be conducted in English
Program Booklet A detailed Program Booklet incorporating all Program Outlines, Administration details etc will
be provided to all the Participants at commencement of the Program.
General Final decision making in all matters relating to this Program will remain with the Institute of Banking Studies.
FOR FURTHER INQUIRIES, PLEASE CONTACT: Ms. Nabila Gholoum Senior Officer - Operations 22901132 Fax 22901181 [email protected] http://www.kibs.edu.kw PO Box 1080 Safat, 13011 Kuwait