Banking Supervisors

Basel III for the Banking Supervisors

Basel III – Pillar 2
The Supervisory Review & Evaluation Process (SREP) and the Internal Capital Adequacy Assessment Process (ICAAP) implementation and Compliance Training

Overview:
The Basel Committee on Banking Supervision has identified four key principles that underpin Pillar 2:

  1. Institutions must have a process for assessing their overall capital adequacy in relation to their risk profile and a strategy for maintaining their capital levels – Internal Capital Adequacy Assessment Process, ICAAP
  2. Supervisors must review the Internal Capital Adequacy Assessment Process, ICAAP and take supervisory action if they are not satisfied with the results of this process – Supervisory Review and Evaluation Process, SREP
  3. Supervisors must expect institutions to operate above the minimum requirements – and should have the ability to require them to hold capital in excess of the minimum.
  4. Supervisors should seek to intervene at an early stage to prevent capital from falling below the minimum levels required to support the risk characteristics of a particular institution and should require rapid remedial action if capital is not maintained or restored.

Objectives:
The seminar has been designed to provide delegates with the knowledge and skills needed to understand make decisions and work for the Second Pillar of Basel III.

Target Audience:
This course is intended for managers and professionals from Banks, Financial Institutions, Multinational Corporations, and Supervisory Agencies. This course is highly recommended for:

  • Directors, Managers and Professionals involved in Basel iii (decision making and implementation)
  • Risk and Compliance Officers
  • Legal Counsels
  • Strategic Planners
  • Analysts
  • Process Owners
  • Network, System and Security Administrators
  • Auditors
  • IT, Security and Management Consultants

Duration: 2 Days, 09:00 to 17:00.

Course Synopsis:

  • Second Pillar: The two tier process
  • The internal assessment – the Internal Capital Adequacy Assessment Process (ICAAP)
  • The evaluation of the Assessment – the Supervisory Review and Evaluation Process (SREP)
  • Risks that are not adequately covered by Pillar 1
  • Enhancing the link between risk profile, risk management systems and capital
  • The Internal Capital Adequacy Assessment Process (ICAAP)
  • The firm’s opinion and evidence of its internal capital adequacy assessment
  • Structure of ICAAP
  • Corporate governance elements
  • The obligation to conduct an ICAAP
  • Processes, strategies and systems used in ICAAP
  • Documenting the ICAAP
  • Review of the ICAAP
  • The proportionality principle
  • Assumptions, methodology, coverage and outcome of the bank’s ICAAP
  • Group/parent ICAAPs
  • The framework from the Committee of European Banking Supervisors (CEBS) – a model around the world
  • The 11 ICAAP High Level Principles
  • Templates, Examples and Case Studies
  • The Supervisory Review and Evaluation Process (SREP)
  • The supervisor’s review and evaluation of the firm’s risk profile and the adequacy and reliability of the firm’s ICAAP
  • Is there sufficient capital to support all material risks?
  • Principles & Key Components of the SREP
  • The supervisory review of the group/parent ICAAPs
  • The Supervisory Review and Evaluation Process (SREP) as part of the wider Supervisory Review Process
  • The framework from the Committee of European Banking Supervisors (CEBS)
  • The 11 SREP High Level Principles
  • The Basel iii / Pillar iii challenges: 1. Technical; 2.Organisational; 3.Regulatory
  • Home and host supervisors
  • Synchronising Pillar 2 work across borders
  • Communicating home and hosts’ Pillar 2 assessments
  • Pillar 2 in the EU – The Capital Requirements Directive
  • Pillar 2 in the USA
  • Pillar 2 in countries around the world. Interesting differences
  • Regulatory Arbitrage: Using Pillar 2 as an advantage for the country
  • Using Pillar 2 as an advantage for the financial firm