Course dates
Course Background
This course offers both a management philosophy and a systematic approach to processing and its application to risk control. The course has been presented successfully to delegates from a wide variety of backgrounds around the world, making it a “must attend course” for back office and middle office/risk control operatives.
Over the 4-day course, you will:
- Define the roles and responsibilities of back and middle offices and how they fit within an ORM/ERM environment
- Construct an effective middle office which will provide the catalyst for co-ordination and control
- Establish a complete systematic control and management programme in your back office that is suitable for all environments
- Learn the value of responsibility management and first time quality, as direct contributors to the control of costs and risks
- Discover how to blend the activities of the back office and middle office into an effective team to facilitate a high quality operational environment and minimise risk
- Understand basic derivative products and how they are used as trading and hedging mechanisms
- Practice risk identification, mitigation and monitoring in accordance with Basel III
- Create a pre-emptive control strategy to reduce your risks, costs and errors
- Prepare properly for new products and initiatives through a New
- Products Steering Committee
- Use your middle office as a training ground for risk control and front office professionals
About this course:
This is an intermediate level training course that will assist you in defining the roles of back office, middle office and risk control in your organisation.
You will be taught to identify risks and to introduce simple mechanisms to monitor, analyse and control, without the need for expensive technical equipment and systems.
One important feature of the course is that it shows how to use simple solutions to solve difficult problems. You will be introduced to the generic nature of products and will leave with the ability to understand their evolution and the purposes for which they were created. This will enhance your ability to control exposures at new products and improve profitability of your organisation.
Who Should Attend?
- Operations Managers
- Middle Office and Risk Managers
- Senior and Middle Management
- Financial and Product Control Staff
- Treasury Managers
- Auditors and Internal Control Officers
- IT and EDP Operatives Regulators
- Compliance Staff
- Accountants and Consultants
- Graduate and Management Trainees
Supporting publication
Day 1
Introduction to back office and middle office management
- Pre-emptive control, improved quality performance and productivity
Quality management
- Quality defined
- The cost of quality and its link with productivity
- The philosophy of responsibility management vs. accountability
- Effective pre-emptive quality control process
- The optimum control point
- Cause and effect analysis
- Graphics and comparative analysis
- Brainstorming/Quality circles
Case study and film of real life banking collapse
Group discussion and analysis on causes and generic issues
The middle office and dealer support
- Todays middle office, its scope and responsibilities
- Defining roles and responsibilities
- The middle office as part of risk control
- The roles of the various risk managers
- The middle office as the catalyst for control
- Definition and mandate
- Establishing a middle office
Group discussion and analysis of highly effective middle offices
Organisation and reporting lines, roles and responsibilities
- Separation of function: Front and back office, risk control and audit
- Best practice structure for effective control
Day 2
Procedures
- Production, use and maintenance
- Control diaries/control points
- Allocation and acceptance of responsibility
- Skills matrix
Straight through processing
- An introduction to the benefits in terms of quality, efficiency, productivity costs and the impact for middle and back offices
- The hierarchy of problem solving (optional)
Derivative product overview
- Introduction to derivatives and their impact on risk
- FRA’s, interest rate and currency swaps, futures and options
- Caps, collars and floors
- Exchange traded vs. OTC products
- Hedging using derivatives
Case studies: Hedge fund
- Lessons learnt and relevance to today’s risk
The back office as a revenue earner/cost saver
- Funding and cash management
- Errors, fines and losses
- Margin controls
- Cost reductions
- Net interest income
Case study: An analysis of Allied Irish Bank (Allfirst) and its implications for back office/middle office managers
Day 3
Workshop: Operational risk management and its impact on middle/back offices
- The BIS/BASEL Accord as it relates to operational risk
- Key points in new Basel II Capital Accord
- Discussion on the implications for risk and control managers
- How to build an operational risk scoring process
- Review of the major types of operational risks
- Measurement framework/scoring approaches
- Workshop on KRI’s/KPI’s
The role of limits
- Establishing limit controls
- Guidance vs. Mandatory
- Credit, position
- Stop loss
- Equity market trading exercise limit setting and the use of a stop loss
- Sensitivity
- Stress testing, gap controls
Staff management
- Effective delegation and acceptance of responsibility
- Setting objectives
- Motivation and stress control
- Team building and the use of peer group pressure
- Training, job rotation and staff development
- The use of positive reporting
- Effective appraisal: The performance/rewards link
Case study: Staff appraisal
Relating results to appraisal, using matrix appraisal process
New products review / New products steering committee (Evaluating a new derivatives product)
- Identifying the risks inherent in a proposed new product and engineering its processing into existing work practices and procedures
- Business continuity planning and disaster recovery workshop
Day 4
Processing controls in the money market, FX and derivatives environment
Detailed product flow through front, middle and back office
- Full check list including preemptive, front office controls, inter-active middle office functionality and operations processing, payment and reconciliation
Management information – construction and use
- Status reports/comparative analysis
- The use of visual reports
- Structure of reports/the control pyramid
Group discussion: “The biggest fraud case in banking history” – Société Générale Paris
- Despite millions spent on IT and risk management systems, one person went undetected for years building up positions of $50 billion and losses of $7.2 billion!
- Société Générale is one failure in a long line of banking failures/crises in which the only real difference is the size of the loss.
- This session shows how the middle office/back office and other risk management departments could have prevented this fraud.
Portfolio controls
- How to establish proper controls over the following portfolios
- Trading
- Investment
- Hedge
- Arbitrage
- Managed asset portfolios
Case study: “UBS London Rogue Trader”
- In September 2011, the Swiss bank UBS announced that it had lost over 2 billion dollars, as a result of unauthorized trading performed by Kweku Adoboli
- 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.
Comments
Course dates