Operational Risk for Financial Institutions, Beyond Regulatory Constraints

Why Should You Attend:

Operational risk is present in every activity of financial institutions. It has been formalized in regulatory from Basel II to onwards, and applied by various banks with different approaches and methods, and especially various degrees of success. Yet it has proven all too often to be a time-consuming effort not always apt to steer banks away from disasters.

Most large losses have been due to the occurrence of operational risks. Whilst financial institutions think they know about this type of risks, the profession has been slow to learn from other older industries dealing with catastrophic risk on a daily basis. The banking world has not been able to avoid large debacles due to e.g. rogue trading and macroeconomic turbulences. It is now critical for banks to set up comprehensive frameworks to handle these risks at reasonable costs and to the satisfaction of regulators, without compromising everybody’s drive to go forward and advance in sophistication. Banks now have to find out, formalize and implement techniques to identify, understand, measure and proactively handle operational risks. Methods for that can vary, but one has to find the best methods, as the price of failure and the rewards for success are too high: straight loss, regulatory effects, reputational loss etc. can no longer be neglected.

Learning Objectives:

• Detecting over-costly risk frameworks
• Risk frameworks and reporting that will help avoiding disasters
• Frameworks for tail risks and for ordinary risks
• Risk handling does not necessarily entail capital requirements
• Banks can be better than regulators at handling operational risk

Areas Covered in the Webinar:

• Operational risk common frameworks
• Minimum capital requirements for operational risk
• The Basel II to IV Accords, and the next ones to come
• Internal and external compliance
• Effective approaches to risk-based economic capital management
• Measuring Risk-Adjusted Return On Capital (Raroc)
• When the world is neither deterministic nor stochastic
• Relationship with other risks
• A framework for optimally handling risks
• Understanding risk tolerance
• Impact of Basel II/III/IV regulation on financial organizations

Who Will Benefit:

This webinar is intended for professionals in financial institutions, regulatory bodies and advisory firms, as well as individuals with a professional interest in the course material. Specific titles and functions that are of particular relevance include:

• Market Risk Management
• Operational risk
• Traded Market Risk
• Market Risk Modelling
• Credit Risk Modelling
• Risk Methodology
• Risk Analysis
• Model Validation
• Regulatory and Economic Capital
• Implementation of Basel Accords
• Finance and Treasury
• Regulation & Compliance
• Financial Institutions Advisory
• Bank Supervision
• Bank Regulation
• Financial Stability and Economic Analysis

Fred Vacelet
Financial Risk Management Consultant, FVacelet

Fred Vacelet, MBA, FRM/PRM, CTM, IFQ, is an international Financial Risk Management Consultant with an expertise in Risk Management methodological frameworks. His experience spans some 25 years, advising banks and software houses on risk management. Fred holds various degrees, including from London Business School, England, with post-graduate studies at the Technische (then West)-Berlin, Germany and Keio (Japan) universities. He is published author on risk management and Basel Accords, and a regular speaker at conferences. Fred writes and presents training courses and workshops on risk management and Basel Accords.

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