(Previously Back Office Management)
- Construct an effective middle office which will provide the catalyst for co-ordination and control
within an ERM culture
- Establish a complete systematic control and management programme suitable for all environments
- Create a pre-emptive control strategy and reduce your risks, costs and errors
- Introduce properly focussed information and accounting systems to report and control risk
- 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
The practitioners guide to achieving a successful and effective middle office
Many institutions have developed middle office functionality as a financial risk and analytical area, but there is a higher need for a co-ordination and management function that brings together all of the elements, including environmental and operational, so they can be managed in a consistent and cohesive way.
This course will illustrate how this can be achieved, without major changes in structure and cost.
The leading international training course on middle office activities
This course is delivered by an experienced practitioner with many years of practical experience in middle office and risk control activities. It has been presented, with great success, to delegates from a wide variety of backgrounds and coming from over 70 countries internationally.
The course uses a very practical approach to the establishment and use of an effective middle office and counters the often over technical, “paralysis by an analysis” approach, taken by many organisations, which has been wholly ineffective in preventing the major banking losses of recent years.
A simple analysis of why difficulties have occurred leads us to conclude that the same generic problems were evident in each case. Detection and prevention could easily have been achieved with a simple systematic control process addressing these basic elements. You will be surprised to learn how easy it can be to identify and control these aspects, using a properly trained, experienced and well motivated workforce.
Structure and content
An intermediate-level training course which will assist you in defining the role of the middle office in your organisation. Delegates will be taught how to identify risks and how to introduce simple mechanisms to monitor, analyse and control, without the need for high investment in technical equipment and systems. They will be introduced to the generic nature of products and leave the course with the ability to understand their evolution and the purposes for which they were created. This will greatly enhance the ability to control exposures on new products and improve profitability.
The course is highly interactive, with group exercises and individual counselling is provided where appropriate.
Who should attend?
- Middle Office and Risk Managers
- Senior and Middle Management
- Operations Managers
- Financial and Product Control Staff
- Auditors and Internal Control Officers
- IT and EDP Operatives
- Regulators
- Compliance Staff
- Accountants and Consultants
- Graduate and Management Trainees
Day 1
Today’s Middle Office
The Middle Office and Dealer Support
• Defining Roles & Responsibilities
Middle Office Establishment
• Functional Analysis
• How to Get Things Started
The Role of the Middle Office in Controlling and Mitigating Risk
• Middle office Functionality Explained
• The middle office as the catalyst for control
• Front Office Support
• The Training & Development Role
• The Co-ordinator
How to Structure Effective Middle Office Operations
• Current Examples
Organisation and Reporting Lines
• Establish best practice reporting structure which includes:-
o The Board
o CEO COO CRO
Workshop and practical discussion on how to make a middle office work effectively in your institution
Case Study
Video: Real Life Documentary of a Banking Collapse
Followed by group discussion concentrating on internal and external failures and its relevance to today’s highly complex and changing environment
Day 2
Introduction to Derivatives
• Definition
• The development of the swaps market
• The swaps market and its players
• Plain Vanilla
• Matched interest rate swap
• Basis swap examples
• Forward swaps
• Currency interest rate swap
Options
• Caps
• Floors
• Collars
• Swaptions
Exchange Traded Versus OTC Products
Hedging using Futures
• Practical Trading Examples
Hedging to Reduce Risk
• Hedge Products
• The Process of Hedging
Case Study: How to hedge using Derivative Products
Establishing Limit Controls
How Guidance Limits vs. Mandatory Limits are used to Control Risk
• Credit
• Stop Loss
• Sensitivity
• Stress Testing
Equity Market Trading
• Exercise: Limit Setting and the Use of a Stop Loss
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 by a properly structured middle office.
Day 3
The BIS/BASEL Accord as it relates to Operational Risk and the Role Of Middle Office.
• Key points in new Basel Capital Accord
• Discussion on the implications for Middle Office and Risk Managers
• Main objectives and implementation plan
• Identification and Prioritisation of key risk factors
• Establishing a risk hierarchy
Group discussion on the benefits / pit falls of risk models and measurement systems
Controlling The Processing Flow
• Where are the Key Risks and Crucial Control Points
• Pre-Dealing Checks & Deal Slip Controls
• Middle office Function
• Back Office Processing
• Payment & Reconciliation
• Accounting & Documentation
Effective Management Information Systems
• The Design of Management Information Systems
• Practical Points & Real life Examples
Visual Reporting & Control Mechanisms
• Sensitivity
• Gap Controls
• Volatilities
• Stress Testing
New Product Steering Committee
Case Study: New Product Steering Committee
Procedures
• The Value of Effective Procedures
• Production
• Use
• Maintenance
Day 4
Case Study: Group discussion: “The Biggest Fraud Case in Banking History” Societe Generale Paris.
Despite Millions of US$ spent on highly developed IT and Risk management systems, one person was allowed to go undetected for years building up positions of $50 billion and fantastic losses of some US$7 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/ and other departments with responsibilities for risk could have easily prevented this fraud
Portfolio Controls
How to establish proper controls over the following portfolios:
• Trading
• Investment
• Hedge
• Arbitrage
• Managed Asset Portfolios
Tools for controlling Portfolio Exposure
• Yield
• Risk / Return
• Funding Costs
• Margin
• Internal Deals
Case Study: Group discussion: The US$2Billion loss at UBS London.
The story so far.
Summary & Close
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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
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.
12-15 Aug 2013 (Johannesburg, South Africa)
11-14 Aug 2014 (Johannesburg, South Africa)
A 4-day training program providing you with a completely up-to-date practical analysis of the complex requirements of International Financial Reporting Standards (IFRS).
23-25 Jul 2013 (Johannesburg, South Africa)
3-5 Dec 2013 (Johannesburg, South Africa)
23-25 Jul 2014 (Johannesburg, South Africa)
3-5 Dec 2014 (Johannesburg, South Africa)
A 3 day financial training course on financial modelling in excel.
10-13 Jun 2013 (Johannesburg, South Africa)
This 4-day financial training course deals with questions like – What is so special about corporate governance? How are banks regulated? and includes insights from international experience.
4-7 Jun 2013 (Johannesburg, South Africa)
The practitioners' guide to achieving a successful and effective back office operation.
3-6 Dec 2013 (Harare, Zimbabwe)
Use a systematic approach to achieve a well controlled and cost effective back office by implementing the latest, leading internationally recognised, management techniques.
19-22 Aug 2013 (Lagos, Nigeria)
A 4-day intensive and hands-on training workshop that will provide delegates with a thorough understanding of current topics.
22-26 Jul 2013 (Nairobi, Kenya)
Finance for Non-Financial Managers is an intensive five-day course designed to provide non-financial managers and others with the knowledge and confidence required to comprehend and participate in financial decision-making and analysis.
3-5 Dec 2013 (Nairobi, Kenya)
This 3-day programme focuses upon how the toolkit of conventional business analysis can be linked sequentially and logically with the principles of financial economics. It will provide critical insight into how the tools and techniques of conventional business analysis can and must be adapted.
10-14 Jun 2013 (Johannesburg, South Africa)
19-23 Aug 2013 (Johannesburg, South Africa)
A complete guide to IPSAS compliance for public sector organisations.
4-6 Mar 2014 (Lagos, Nigeria)
3-5 Jun 2013 (Johannesburg, South Africa)
A 3-day intermediate training course with comprehensive coverage of the complexities of accounting and financial components of pensions and other long-term employee benefits.
19-21 Jun 2013 (Nairobi, Kenya)
18-20 Jun 2014 (Nairobi, Kenya)
9-12 Sep 2013 (Lagos, Nigeria)
This 4-day intensive and hands-on raining workshop will provide delegates with a thorough understanding of IFRS reporting requirements.
3-6 Sep 2013 (Lagos, Nigeria)
Use a systematic approach to achieve a well controlled and cost effective back office by implementing the latest, leading internationally recognised, management techniques.
17-20 Jun 2013 (Nairobi, Kenya)
A 4-day course designed to teach delegates sound internal audit skills with respect to Enterprise Risk Management.
23-26 Sep 2013 (Johannesburg, South Africa)
This program covers how to design a successful corporate banking strategy and provide the adequate products and services to the different customers groups. It applies to banks in developed and emerging markets.
9-18 Dec 2013 (Johannesburg, South Africa)
Over the course of eight days, delegates will gain a thorough knowledge of not only IFRS but also will have the opportunity to gain a deep knowledge in certain critical areas. This intensive and hands-on training workshop will provide delegates with a thorough understanding current topics.
25-28 Nov 2013 (Nairobi, Kenya)
This 4-day financial training course deals with questions like – What is so special about corporate governance? How are banks regulated? and includes insights from international experience.
24-27 Sep 2013 (Accra, Ghana)
An intensive 4-day programme aimed at audit professionals in banks and other financial institutions.
22-25 Sep 2014 (Dar es Salaam, Tanzania, United Republic of)
An intensive 4-day programme aimed at audit professionals in banks and other financial institutions.
22-25 Apr 2014 (Nairobi, Kenya)
An intensive 4-day programme aimed at audit professionals in banks and other financial institutions.