Basel Cert

Basel-CERT is a vendor neutral certification program that has been designed to prove that professionals have the knowledge and skills needed to understand and support Basel II compliance

The Basel-CERT exam will cover the following areas:

The Bank for International Settlements (BIS)

• The Basel Committee on Banking Supervision
• From the Young Plan (1930) to Basel II
• Regulatory supervision of internationally active banks
• The failure of the Bankhaus Herstatt and the crisis of confidence

First Basel Capital Accord

• Formulating broad supervisory standards and guidelines
• Regulatory and economic capital
• Important objectives
• 1980s: The capital ratios of the main international banks are deteriorating
• Credit Risk
• Assets are weighted by factors
• On-balance sheet engagements
• Off-balance sheet engagements
• Examples of capital requirements
• December 1987: The Basel Capital Accord approved by the G10
• Basel I amendments

The New Basel Capital Accord (Basel II)

• Realigning the regulation with the economic realities of the global banking markets
• New capital adequacy framework replaces the 1988 Accord
• Improving risk and asset management to avoid financial disasters
• "Sufficient assets" to offset risks
• The technical challenges for both banks and supervisors
• How much capital is necessary to serve as a sufficient buffer?
• The three-pillar regulatory structure
• Purposes of Basel II
• Scope of the application
• Pillar 1: Minimum capital requirements
• Credit Risk – 3 approaches
• The standardized approach to credit risk
• Claims on sovereigns
• Claims on banks
• Claims on corporates
• The two internal ratings-based (IRB) approaches to credit risk
• Some definitions: PD - The probability of default, LGD - The loss given default, EAD - Exposure at default, M – Maturity
• 5 classes of assets
• Pillar 2: Supervisory review
• Key principles
• Aspects and issues of the supervisory review process
• Pillar 3: Market discipline
• Disclosure requirements
• Qualitative and Quantitative disclosures
• Guiding principles
• Employees Affected
• Effective Dates

Framework for internal control systems in banking organizations - Basel Committee on Banking Supervision

• The 13 Principles for the Assessment of Internal Control Systems
• The 13 Principles and COSO
• The control environment
• Risk assessment
• Control activities
• Information and communication
• Monitoring
• Types of control breakdowns typically seen in problem bank cases
• The objectives and role of the internal controls framework
• The major elements of an internal control process
• Evaluation of internal control systems by supervisory authorities
• Role and responsibilities of external auditors
• Supervisory lessons learned from internal control failures

What is Operational Risk

• What is operational risk
• Legal risk
• Information Technology operational risk
• Operational, operations and operating risk
• The evolving importance of operational risk
• Quantification of operational risk
• Loss categories and business lines
• Operational risk measurement methodologies
• Identification of operational risk
• The Delphi method

Operational Risk Approaches

• Basic Indicator Approach (BIA)
• Standardized Approach (SA)
• Alternative Standardized Approach (ASA)
• Advanced Measurement Approaches (AMA)
• Internal Measurement Approach (IMA)
• Loss Distribution (LD)
• Standard Normal Distribution
• “Fat Tails” in the normal distribution
• Expected loss (EL), Unexpected Loss (UL)
• Value-at Risk (VaR)
• Value-at Risk and Basel I amendment, 1996
• Value-at Risk and Basel II
• Calculating Value-at Risk
• Monte Carlo simulations
• Monte Carlo limitations
• Extreme Value theory
• Scoreboards
• Stress Testing
• Stress testing and Basel
• (AMA) Advantages / Disadvantages
• Recognition of the firms’ own modelling of operational risk losses
• “Weak banks”, internal and external audit and sound practices for operational risk
• Self assessment
• Key Risk Indicators
• Operational Risk Measurement Issues
• The game theory
• The prisoner’s dilemma – and the connection with operational risk measurement and management
• Operational risk management
• Operational Risk Management Office
• Key functions of Operational Risk Management Office
• Key functions of Operational Risk Managers
• Key functions of Department Heads
• Internal and external audit
• Operational risk sound practices
• Operational risk mitigation
• Insurance to mitigate operational risk
• Third-party service providers and vendors
• Redefining outsourcing
• Outsourcing services and Basel II compliance
• The new definition of outsourcing
• Outsourcing after Basel II
• Offshore outsourcing is also redefined
• Key risks of outsourcing
• What is needed from vendors and service providers

Basel II and other regulations

• Basel and other regulations
• Governance issues
• Capital Requirements Directive (CRD)
• Markets in Financial Instruments Directive (MiFID)
• What will be the impact of MiFID to EU and non EU banks?
• Aligning Basel II operational risk and Sarbanes-Oxley 404 projects
• Common elements and differences of compliance projects
• New standards
• Disclosure issues
• Multinational companies and compliance challenges

Fees (2008/2009)

Initial application fee: US$ 295.00

Three yearly renewal fee: US$ 150.00

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