Operational Risk and Basel II
Introduction
It is only recently that Operational Risk has emerged both as a
risk category and a discipline in its own right, a process which
culminated in the separate capital charge for Operational Risk created
by the new Basel II Accord.
Operational Risk, however, takes many different forms, which makes it difficult to measure, control or even identify. Quantitative methods can help, but the Basel II Accord is very clear: “A bank must use scenario analysis of expert opinion… to evaluate its exposure to high-severity events. This approach draws on the knowledge of experienced business managers and risk management experts to derive reasoned assessments of plausible severe losses”.
Course description
Experience, therefore, is key and accordingly this two day course
is run by a seasoned Operations expert with many years of experience to
provide operations and support staff with the practical knowledge
needed to understand the operational risks aspects and implications of
their day to day activities. Duration: 2 Days Prerequisites: None Who should attend? Anyone wishing to gain a comprehensive understanding of operational risk management. Outcomes: By attending this course, delegates will understand:
- The key concepts of Operational Risk Management such as Risk Events, Key Risk Indicators, Scenario Analysis, Risk Appetite etc.
- The Basel II Approaches to Operational Risk Management
- How to prioritise risks
- The critical value to the enterprise of a robust Operational Risk framework and function
- How to identify, prevent and manage operational risk
Your course presenter
Ingrid Pirlet is a Senior Banker with over 30 years of experience.
She has held a number of senior positions including Head of
International Operations, Chief Operating Officer, Head of Internal
Audit, Group Compliance Officer and Operational Risk Manager at various
banking institutions including Citibank and Barclays Bank plc.
She has been instrumental in setting up a new investment bank and a new
compliance function and participated in integration, process
re-engineering and change management initiatives. For the past three years Ingrid has been performing senior assignments for Royal Bank of Scotland and Lloyds TSB in the UK.
The programme
Day 1 – Operational Risk Management
Session 1: Operational Risk overview
- What is operational risk
- The Basel II Operational Risk requirements
- Operational risk charge for the Basel II Approaches
- Boundary events
- The components of an Operational Risk Framework
Case Study: Calculation of operational risk charge for the Basic Indicator Approach and the Standardised Approach Session 2: Development of an Operational Risk Framework
- Policies and Procedures
- Process Maps
- Identification of key controls
- Risk appetite and risk tolerance
- Key Risk Indicators
- Internal Loss Data
- Scenario Analysis
- Risk Register
- Risk Events
Day 2 - Operational Risk Management
Session 1: The Building blocks of an Operational Risk Framework
- Risk and Control identification
- Development of a risk appetite and risk tolerance level
- Risk and Control Self assessment
- Severity and Likelihood scoring
Case Study: Risk and control identification Case Study: Setting Risk appetite/risk tolerance Case Study: Performing a Risk and control self assessment including scoring for severity and likelihood Session 2: The Building Blocks of an Operational Risk Framework
- Creation of a Loss Database
- Implementation of a Risk Register
- Scenario Analysis
- Development of Key Risk Indicators
Session 3: Embedding the Operational Risk Framework
- Embedding the framework
- Key Stakeholders
- Monitoring and Reporting
- Remediation
- Business Reviews
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