Certified Basel iii Professional (CBP)

Our training follows closely the principles of sound practices of management and operational risk, as set down by the committee. Training Attendees will learn practical skills and solutions that will help them support the Basel III requirements, whilst implementing the solutions and skills learned within their organisation. 97 % of pass- rate.
The seminar will give you the ability to:

Demonstrate a practical understanding of the core concepts involved in Advanced Measurement Methods for allocation of capital to operational risk, their respective advantages and limitations.

Prepare for the BaselCert Examination, which we can host at the end of the course (optional).

Define hands-on strategies and techniques for the definition, measurement, analysis, improvement, and control of operational risk within a banking organization.

This course is recommended for all professionals who need to understand and speak the specialized language of compliance.

IT Auditors

Chief Risk and Compliance Officers

IT, Security and Management Consultants

Certified Basel iii Professional (CBP)

Certified Basel iii Professional (CBP) 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 III compliance

Overview to Basel Accord

  • Overview to International Banking Regulations
  • Causes of the financial crisis- Was Basel II responsible?
  • Introduction to Basel Norms – The Basel III papers
  • Introduction to the Basel III Amendments
  • Basel III Framework – Role played by The Financial Stability Board (FSB), the G20
  • Glossary
  • Exercises
  1. The New Basel III Principles – Focused areas
  • Board practices
  • Senior management
  • Risk management and internal controls
  • Compensation
  • Complex or opaque corporate structures
  • Disclosure and transparency (including point of sale and post-sale)

 

  • Other important areas include:
    • Sound Practices for the Management of Operational Risk
    • Sound management of risks related to money laundering and financing of terrorism
    • Supervisory guidance for managing risks associated with the settlement of foreign exchange transactions
    • The 9 principles

 

  1. The Quality of Capital
  • The numerator
  • Limits and Minima
  • Common Equity Tier 1
  • Common shares issued by the bank
  • Additional Tier 1 capital
  • Tier 2 capital
  • Double Gearing and Basel III
  • Comprehensive Risk Measure (CRM) – Securitisation and Resecuritisation
  1. The Risk Weighted Assets
  • The denominator
  • Analysis of risk-weighted assets for credit risk
  • Analysis of risk-weighted assets for market risk
  • Analysis of risk-weighted assets for operational risk
  • Understanding securitization
  1. The Capital Ratio
  • In addition to the quality of capital and risk coverage
    Calibration
  • Transition period

 

  1. Capital Conservation
  • Introduction of macro-prudential approach
  • Distribution policies that are inconsistent with sound capital conservation principles
  • Supervisors enforce capital conservation discipline

 

  1. Leverage Ratio
  • Introduction of the ‘risk-invariant’ maximum leverage ceiling limit
  • Strong Tier 1 risk based ratios with high levels of on and off balance sheet leverage
  • Simple, non-risk-based leverage ratio
  • Introducing additional safeguards against model risk and measurement error
  • Calculation of the leverage ratio. The January 2014 amendment.
  • Basel III leverage ratio framework and disclosure requirements
  1. Global Liquidity Standards
  • The Liquidity Coverage Ratio (LCR) Standards
  • LCR by significant currency
  • LCR disclosure standards
  • Stock of high-quality liquid assets
  • The Net Stable Funding Ratio (NSFR)
  • Available stable funding (ASF)
  • Required stable funding (RSF)
  • Contractual maturity mismatch
  • Liquidity Transfer Pricing (LTP)
  • Funds Transfer Pricing (FTP) Framework
  • Concentration of funding
  • Market-related monitoring tools
  • Transitional arrangements
  • Liquidity stress testing along the new Basel III NSFR and LCR requirements
  • Pillar 2 Internal Liquidity Adequacy Assessment Process (ILAAP)
  1. Countercyclical Capital Buffer
  • Procyclical or Countercyclical?
  • The new countercyclical capital buffer
  • Home / Host Challenges
  • Guidance for national authorities operating the countercyclical capital buffer
  • Principles underpinning the role of judgement
  • Jurisdictional reciprocity
  • Frequency of buffer decisions and communications
  • Treatment of surplus when buffer returns to zero
    Interaction with Pillar 1 and 2
  1. Systemically Important Financial Institutions
  • (SIFIs) SIFIs and G-SIFIs
  • Improvements to resolution regimes
  • Methodology and higher loss absorbency requirements
  • More intensive supervisory oversight
  • Stronger robustness standards
  • The Financial Stability Oversight Council (FSOC)
  • The European Systemic Risk Board (ESRB)
  • Strengthening SIFI supervision
  1. Enhanced Risk Coverage for Large Financial Institutions
  • The Basel Committee and Financial Stability Board endorse central clearing and trade reporting on OTC derivatives
  • Derivative counterparty credit exposures to central counterparty clearing houses (CCPs)
  • OTC Central Clearing (CCPs)
  • Trading book counterparty credit risk capital charges
  • Asset Value Correlation Adjustment to RWA calculation for SIFIs
  • Margin Requirements for non-centrally cleared derivatives
  • Standardised approach for measuring counterparty credit risk exposures
  • Measuring and controlling large exposures

 

  1. Systemically Important Financial Institutions (SIFIs)
  • SIFI (‘too big to fail’ prevention) requirements:
    • Designation of global vs. national (or domestic) SIFIs (‘G-SIFI’ & ‘N-SIFI’) requirements (including recovery & resolution plans (‘living wills’)
    • ‘Risk Invariant Leverage’ ratio limit – definition of the accounting based leverage limit and impact analysis of effect of ‘Fair Value Accounting’ on leverage
  1. Risk Modelling, Stress Testing and Scenario Analysis
  • Capture of systemic risk/tail events in stress testing and risk modelling
  • VaR shortcomings: the normality assumption
  • Need for a strong stress testing programme
  • Systemic risk capture in banks’ risk models
  • Credit risk VaR additions to trading book capital – Specifi c Risk Charge (SRC) & Incremental Risk Charge (IRC)

 

  1. Capital Composition – Measuring Risk Exposures
  • Enhanced Risk Coverage
  • Stressed Value-at-Risk (S-VaR)
  • Counterparty Credit Risk (CCR)
  • Credit Valuation Adjustment (CVA) risk capital charge
  • Wrong-Way Risk
  • Standardised approach for measuring CCR exposures
  1. Stress testing
  • Principles for sound stress testing practices and supervision
  • Use of stress testing and integration in risk governance
  • Stress testing methodologies
  • Scenario selection
  • Stress testing principles for banks
  • Stress testing principles for supervisors
  • Firm-wide stress testing
  1. The Impact of Basel III
  • Basel Impact on Financial System
  • Investment Banking, Corporate Banking, Retail Banking
  • Investment banks are primarily affected, particularly in trading and securitization businesses
  • The new capital rules have a substantial impact on profitability
  • Banks with insurance subsidiaries
  • Impact on Banking Divisions
  • Minority investments after Basel III
  • Interaction between Solvency II and Basel III
  • Regulatory Arbitrage after Basel III
  • Examples and Case Studies

 

  1. Key Challenges and Issues – What Should Firms Be Considering?
  • Enterprise Risk and Capital Management
  • Capital Quantity
  • Capital Quality
  • Credit Rating
  • Counterparty Risk for Trading Activities
  • Leverage
  • Liquidity Management
  • IT and Operational Impacts
  • Implementation Roadmap
  • Roadmap

 

  1. Basel lll – Next steps (In progress)
  • Trading book capital treatment: Basel Fundamental Review of the Trading Book (FRTB) in the fi nal consultation process
  • Trading book: banking book boundary
  • Standardised approach for calculating market risk capital: complete overhaul
  • Internal Model Approach (IMA): Replacement of VaR with Expected Shortfall (ES) model & SA requirements added to the IMA
  • Revision of IRC and other Basel 2.5 risk measurement approaches in trading book
  • Interest Rate Risk in the Banking Book (IRRBB) to Pillar 1 Market Risk Capital Charges
  • Measuring IRRBB: Re-Pricing gaps, Earnings at Risk (EaR) and Economic Value of Equity (EVE)

 

Appendix

 Recognising the risk-mitigating impact of insurance in operational risk modelling

  • Insurance industry supervision
  • Banking supervisors’ assessment processes
  • Approval of insurance contracts
  • Revoking approval for recognising insurance mitigation in capital
  • Maximum 20% operational risk capital charge reduction
  • Modelling methodology
  • Traditional and proposed insurance policies
  • Criteria for recognising insurance mitigation
  • Partial insurance modelling
  1. Understanding Supervisory Colleges
  • Good practice principles on supervisory colleges
  • Principles for both home and host supervisors
  • Principle 1: College objectives
  • Principle 2: College structures
  • Home supervisors, Host supervisors
  • Principle 3: Information sharing
  • Principle 4: Communication channels
  • Principle 5: Collaborative work
  • Principle 6: Interaction with the institution
  • Principle 7: Crisis management
  • Principle 8: Macroprudential work
  • Case Study: Committee of European Banking Supervisors, Joint decision on model validation
  1. Basel III for international financial organizations
    The Dodd-Frank Act in the USA and the Basel III framework
  • The Capital Requirements Directives (II, III, IV) of the European Union and the Basel III framework

Initial Examination fee: US$ 495.00

Three yearly renewal fee: US$ 250.00


Examinations