Course Overview

This course comprise of a series of units or ''core themes'' to cellectively cover the complete scope of norms and requirements as prescribed by the Basell II mandate. Beginning with an explanation of the components that form the ORM framework, describing then the risk assessment process, the subsequent units delve into the qualitative and quantitative details in support of effective OpsRisk Management. The final two units look at the management application, as well as realization/deployment challenges.

Course Methodology

Course Objectives

Upon successful completion of this course:

  • Explain the concept of "risk identification" in the context of Basel II and operational risk management
  • Define the operational risk management framework, policy, and processes as per Basel II Accord
  • Explain the key components of loss data collection methodology
  • Define and explain what is risk self-assessment and the various risk self-assessment components
  • Explain takeaways or key considerations for developing and implementing effective risk self -assessment processes
  • Describe the concepts of loss distribution approach (LDA), loss database, and distribution modeling and its strategies
  • Explain the process of loss simulation and understand different aspects of capital calculation
  • Analyze the importance of operational risk management for the management
  • Describe a successful deployment approach or strategy for operational risk management framework 

Target Audience

This module is for audience with intermediate skills and expertise in risk management at banks. Typical audience will also include middle and senior management from banking departments like OpsRisk Management, Control, Auditing, Compliance, as well as Information Technology (IT).
 
Service providers to banks will also find these courses very relevant in establishing a sound understanding of their client's needs in support of Basel II OpsRisk Management. 

Target Competencies

Course Outline

ORM FRAMEWORK

  • Define the components that collectively form a sound operational risk management framework in support of the requirements prescribed by the Basel II Accord
  • Explain the concept of operational risk (OpsRisk), including its scope
  • Explain the required governance and organizational constructs
  • Describe OpsRisk necessary policy and processes
  • Describe functional requirements of underlying OpsRisk  enabling systems

RISK IDENTIFICATION 

  •  Explain the concept of "risk identification" in the context of Basel II and operational risk management

LOSS DATA COLLECTION METHODOLOGY 

  •  Explain the key components of loss data collection methodology 

RISK SELF-ASSESMENT 

  • Define and explain what is risk self-assessment
  • Describe the various risk self-assessment components, including:
  • The concept of steady-state process risk and control analysis
  • Growth areas and special projects' analysis
  • Risk and control culture assessment
  • Scenario analysis
  • Explain takeaways or key considerations for developing and implementing effective risk self-assessment processes.

KEY RISK INDICATORS 

  • Define and explain the "key Risk Indicators" (KRIs)
  • Describe key components of a KRI framework
  • Design and rationalizing of KRIs
  • Data acquisition, maintenance, and distribution in support of KRIs
  • KRI reporting Recognize KRI implementation challenges
  • Effectively summarize KRIs utilizing this course's key takeaways 

1- RISK QUATIFICATION

  • Define and explain the term "quantification" in conjunction with operational risk
  • Identify the key components that constitute OpsRisk quantification, namely:
  • Loss distribution approach (LDA)
  • Loss database
  • Distribution modeling o Loss simulation
  • Capital calculation
  • Appreciate the challenges associated with operational risk quantification
  • Identify the key considerations for developing a sound quantification model

2- RISK QUANTIFICATION 

  • Describe the concepts of loss distribution approach (LDA)
  • Describe the concepts of loss database
  • Understand and explain distribution modeling and its various
  • Strategies in detail
  • Explain the process of loss simulation Explain the different aspects of capital calculation 

MANAGEMENT APPLICATION 

  • Provide an overview of the management applications
  • Analyze the key management applications:
  • Enhanced Risk Awareness
  • Actions to Reduce Operational Losses
  • Capital Planning and Risk Optimization
  • Discuss the key take-aways

REALIZATION CHALLENGES AND DEPLOYMENT STRATEGY

  • Discuss the typical challenges in the practical realization of OpsRisk capabilities and methods ▪ Describe a successful deployment approach or strategy
Location & Dates
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