Addressing the fundamental causes of operational risk, this course demonstrates how the correct mix of philosophical and operational elements combine together to ensure success. It provides a simple structure for control and automatic mechanisms for detection and resolution of problems, using an evolutionary approach your new knowledge.
Summary of course content
- A systematic approach to the control of all operational risks within an ERM culture
- A pre-emptive control strategy providing the ability to identify, monitor and control those key areas of exposure
- The skills to analyse, measure and manage operational risk using best practice techniques, in line with Basel requirements
- The ability to detect and control the potential for fraud and manipulation
- How to protect your institution against a "rogue trader"
- An introduction to the latest responsibility management philosophy and practice which will create the correct environment for high quality, risk mitigation and success
- An understanding of the new role of today’s C.R.O. and other risk departments
- The experience to develop a properly focused management information structure to promote risk awareness and facilitate control
This course provides a clear structure for control and automatic mechanisms for detection and resolution of problems, using an evolutionary approach.
A series of real life case studies illustrate where problems originate and how they can be solved in a simple systematic way.
Who should attend?
- Operations Managers
- Back and Middle Office Managers
- Risk Managers
- Treasury Managers
- Internal Control Officers
- Auditors / Compliance / Accountants
Defining operational risk
- Define the elements of operational risk
- Introduce the value of a quality environment and the need for a sound and responsible management philosophy
The role of quality in controlling and reducing risk
- Achieving first time quality
- The management of quality
- The use of optimum control points
- Key risk controls
- ause and effect analysis
- Generic cause factors
Case study: Problem origination and escalation
This case study will show how big problems and risks can originate from relatively insignificant cause elements and how these problems can be prevented at source.
Case study: Video Real Life Documentary of a Banking Collapse
Followed by group discussion concentrating on internal and external failures and its relevance to todays highly complex and changing environment.
The role of responsibility management
- Its use in controlling risk
- How to implement
- Allocation and acceptance of responsibility
- The dangers of short term strategies
The role of the middle office in controlling and mitigating risk
- Middle office functionality explained
- The middle office as the catalyst for control
- The co-ordinator
Case study: Allied Irish Bank (ALLFIRST)
This case study will clearly highlight how a lack of proper controls, knowledge and infrastructure can have such devastating consequences. It will also show how this could have been identified and easily prevented.
The use of limits as a control mechanism
- Guidance limits and mandatory limits
- Credit / Settlement
Case studies: The use of stop loss limits
Principles of hedging to reduce risk
- Hedge products
- The process of hedging
Case study: How to hedge using derivative products
New products steering committee
- Evaluating and controlling risk
- Pre-empting problems
- Identifying the risks inherent in a proposed new product and engineering its processing into existing work practices and procedures
BCP disaster recovery
- The role and responsibility for operations risk managers
The BIS/Basel Accord as it relates to operational risk
- Key points in the new Basel Capital Accord
- Discussion on the implications for risk managers
- Main objectives and implementation plan
Implementing operational risk management within an enterprise risk management structure
Organisation and reporting lines
- Establish best practice reporting structure which includes:
- The board
- Line managers, risk managers, audit and compliance
Using risk indicators: The role and purpose
Case examples: KRI, KPI, KCI - Historical and predictive
- Detecting, analysing and controlling risk elements
Build an operational risk scoring process
- Review of the major types of operational risks
- Measurement framework
- Scoring approaches
- Critical success factors
- Identification and prioritisation of key risk factors
- Establishing a risk hierarchy
Meeting the Central Banks requirements for BIS Basel Accord
Group discussion on the benefits / pitfalls of risk models and measurement systems.
The role of management information in controlling risk
- Highlighting risk areas and non-compliance
- Documenting and authorisation of exceptions and excesses
- Reports design and structure
- Getting focused
Case study: Hedge fund risks
Group discussion on its relevance to todays financial and operational risks
The systematic control process workshop
- An analysis of the control process from initiation through to settlement and reconciliation with detailed examination of:
- Pre-dealing controls
- Dealing controls
- Processing controls
This section takes the delegate on a step-by-step journey through each stage of the process with real life case studies and examples of problems, risks controls and solutions. It will provide a generic and systematic control process to limit and control risk at every stage.
Case studies and real life examples including back office frauds.
Case study: "The Biggest Fraud Case in Banking History Société Générale Paris
Despite millions of US$ spent on highly developed IT and risk management systems, one person went undetected for years building up positions of $50 billion and losses of US$10 billion! Societe Generale is just another failure in a very long line of banking failures/crisis in which the only real difference is the size of the actual loss.
This session will clearly demonstrate how the middle office, back office and other departments with responsibilities for risk could have easily prevented this fraud.
The course director is a senior operations manager with over 21 years' experience at management level in international banking. His responsibilities have included covering provision of support for a wide range of products including; fixed income securities, derivatives, FX, money markets, emerging markets and equities. He has also managed support areas for commodities trading mortgages.
In addition to his operations experience, he has managed the control and risk areas at major financial institutions and has been responsible for the implementation of security processing systems in London and other European cities. He previously held positions at IBJ International, San Paolo Bank, Drexel Burnham Lambert, CIBC, Cumulus Systems, Chase Manhattan Bank and Hill Samuel Investment Bank.
Courses run by this instructor
4-5 Star Hotel in Singapore, Singapore,
All of our courses are held in 4 5 star hotels, chosen for their location, facilities and level of service. You can be assured of a comfortable, convenient learning environment throughout the duration of the course.
Due to the variation in delegate numbers, we will send confirmation of the venue to you approximately 2 weeks before the start of the course. Course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.
Interested in holding this course in-house? Please fill out your details and a member of our team will be in touch with more information.