At
the heart of the Basel II requirements for international credit-risk management
is the need to have sound data behind customer identification and risk
assessment. Information technology represents the greatest area of risk on an
operational level for the successful implementation of Basel II compliance.
Data quality and audit-ability is the cornerstone of an end-to-end global
compliance solution.
The four principal objectives behind
Basel II are:
To promote soundness and stability of the global banking
and financial system
To enhance competitive equality
To provide a more competitive approach to addressing
risks and promote best practices in risk management
(the original Accord failed to address credit risk and operational risk)
To provide a more widely applicable approach to the
capital assessment process.
Basel II applies internationally to active banks in the G10 countries, including
Canada and the United States as well as their subsidiaries in non-G10 countries.
The EU has decided to adopt Basel II for all credit institutions and investment
businesses operating in their jurisdiction.
Basel II challenges existing thinking as to where and how financial information
and data is provided and controlled. The Basel II Accord introduces new levels
of complexity with specific data and reporting requirements. Most financial
organizations use transaction-oriented processes. Thus, some of the technology
and process challenges that must be addressed to ensure Basel II compliance are:
Re-educate the organization
Technology infrastructure upgrades
Data quality
Audit trail management
Data management
Reporting
Risk Management
By the end
if the course, delegates will:
Understand the nature and causes of
banking risks
Have a clear understanding of the risk
management process
Understand asset-liability management models
Understand both credit risk models and market risk
Understand the complexities of portfolio and capital
management
Day 1 – banking risks
The
Accords
Understanding Basel I and Basel II
accords
The “Three Pillars” of
Basel
Potential problems
Banking
Risk management
Understanding the risk management process
Risk versus capital
Credit-risk
Operational risk
Other risk areas
Risk
mitigation strategies
Credit-risk
Securitization
Risk
assessment processes
The audit process
Day 2: The Audit Process
The internal audit role
Internal audit in practice
Internal audit’s role in corporate
governance
Relations with the external auditor and
the regulator of banks
Internal audits relationship with the
compliance officer
Audit Program Development and Techniques
Developing the compliance audit programme
Developing the individual audit
Operating
risk auditing
Operating Risk
Identification and Assessment:
Operating Risk Measurement and
Quantification
Operating Risk
Analysis, Monitoring & Reporting
Operating Risk Capital
Allocation
Operating risk auditing
Market
risk
Understanding market risks
Models for market risks
Portfolio market risk
Market risk auditing
Credit
risk models
Risk drivers
Risk exposures
Standalone risk
Risk correlations
Portfolio risk
Capital risk
Capital risk auditing
Who Should Attend
Bankers,
Accountants, Auditors and consultants who are required to implement, or audit the
implementation of, the Basel II Accords in the course of their duties.
