Risk Management

Risks arise in almost every part of an organization and risk management has emerged as one of the most important challenges facing enterprises today.  Risk management refers to the identification, measurement, monitoring and mitigation of potential losses.   Today most organizations have formalized intricate systems and processes to address the many risks they encounter.  Finance IQ brings deep industry experience in risk management and offers a wide variety of programs that range from broad overviews of enterprise risk management to modules to those that focus on specific types of risk like liquidity, operational and credit.

Fundamentals of Risk Management

Risks arise in almost every part of an organization and risk management has emerged as one of the most important challenges facing enterprises today. This two day course, delivered by a Financial Risk Manager (FRM®), provides participants with a comprehensive framework for identifying and assessing exposures within an organization.  In reviewing the main types of risk, participants will learn the principal assessment tools and approaches to how exposures can be effectively managed.

Learning Objectives

Outline/Topics:

Define risk and explain enterprise risk management

Identify major types of risk within an organization

Describe a framework for enterprise risk management and the role it serves in an organization

Describe the implications that a defined risk culture has on corporate governance

Discuss risk assessment tools and measurement techniques

Describe various risk controls in an organization

Distinguish among activities related to risk transfer, exclusion or reduction

Duration:  Two days

Program Level:  Basic

Prerequisites:  There are no prerequisites

CPE:  14.0 CPE Credits

Day 1
  • Introduction
    • Defining risk
    • Impacts of risk
    • Types of risk
    • Risk, uncertainty and reward
    • Brief history of major failures in risk management
  • Business Strategy and Risk Coverage
    • Credit
    • Liquidity
    • Strategic/Business/Reputation
    • Market
    • Operational
    • Compliance/Legal/Regulatory
    • Financial
    • Capital adequacy
  • Risk Appetite
    • Risk tolerance
    • Risk appetite statement
    • Link to business strategies and objectives
  • Enterprise Risk Management Principals & Framework
    • Principals of risk management
    • Risk management framework
    • Architecture
    • Strategy
  • Culture, Governance and Policies
Day 2
  • Risk Data and Infrastructure
    • Data capture and collection
    • Data integration
    • Data analysis
    • Information systems requirements and best practices
  • Measurement and Assessment
    • Approaches and methodologies
    • Measurement techniques
    • Risk classifications and matrix
    • Risk ratings
    • RAROC
    • Failure mode and effect analysis
  • Risk Controls
    • Inherent vs residual risk
    • Features of a control environment
    • Types of controls
  • Responses
    • Risk transfer & insurance
    • Hedging and risk reduction
    • Exclusion
    • Stress testing

For a detailed outline and additional information on this course or to find out about our other courses, contact us at (646) 244-5190 or info@financeiq.net!

Risk Management for non-Quants

Risks arise in almost every part of an organization and risk management has emerged as one of the most important challenges facing enterprises today. This two day course, delivered by a Certified Financial Risk Manager (FRM®), provides participants with a comprehensive framework for identifying and assessing exposures within an organization.  In reviewing the main types of risk, participants will learn the principal assessment tools and approaches to how exposures can be effectively managed.  The course is designed to assist managers responsible for monitoring, measuring and controlling risks.  Industry practitioners and regulators will benefit from a solid grounding in the risk management concepts, current regulatory requirements and market practices.

Learning Objectives

Outline/Topics:

  • Define risk and explain risk management
  • Identify major types of risk within an organization
  • Define and discuss market, credit, liquidity, model and operational risk
  • Provides basic measurements of various types of risk
  • Discuss risk assessment tools and measurement techniques
  • Explain Value at Risk, its applications and variations
  • Describe various risk controls in an organization
  • Distinguish among activities related to risk transfer, exclusion or reduction
  • Describe a framework for enterprise risk management and the role it serves in an organization
  • Describe the implications that a defined risk culture has on corporate governance

Duration:  Two days

Program Level:  Basic

Prerequisites:  There are no prerequisites

CPE: 21.0 CPE Credits

Day 1
  • Introduction
    • Defining risk
    • Impacts of risk
    • Types of risk
    • Risk, uncertainty and reward
    • Brief history of major failures in risk management
  • Business Strategy and Risk Coverage
  • Focus on Value at Risk (VaR)
    • Historical, parametric, Monte Carlo Simulations
    • Comparing VaR calculations
    • VaR through time
    • Marginal VaR
    • Incremental VaR
    • Liquidity VaR
    • Model risk and Extreme events
    • Back testing and stress testing
  • Credit Risk
    • Defining credit risk
    • Probability of default
    • Loss given default
    • Regulatory approaches to managing credit
  • Liquidity & Market Risk
    • Measuring liquidity risk
    • Liquidity and leverage
    • Liquidity VaR
Day 2
  • Enterprise Risk Management Principals & Framework
    • Approaches and methodologies
    • Measurement techniques
    • Risk classifications and matrix
    • Risk ratings
    • RAROC
    • Operational risk
    • Control Self Assessments
    • Key Risk Indicators
  • Risk Controls
    • Inherent vs residual risk
    • Features of a control environment
    • Types of controls
  • Responses
    • Risk transfer & insurance
    • Hedging and risk reduction
    • Exclusion
    • Stress testing

For a detailed outline and additional information on this course or to find out about our other courses, contact us at (646) 244-5190 or info@financeiq.net!

Fundamentals of Financial Risk Management: Focus on Banking & Capital Markets

Dangers that are inherent in the financial system make understanding risk management essential for anyone working in, or planning to work in, the financial sector.  This three day course provides participants with a comprehensive review of the major techniques used to identify and measure various financial risks and analyze how these risks can influence financial institutions.  Participants will also learn about recent regulatory changes designed to assist financial institutions manage their risk exposures.

Learning Objectives

  • Discuss major types of financial risk and how they influence various financial institutions
  • Define and calculate various statistical measures of risk
  • Identify, explain and distinguish among risks associated with different types of securities
  • Define and calculate Value at Risk (VaR) and explain the various approaches for estimating VaR
  • Explain and calculate expected shortfall (ES) and compare and contrast VaR and ES
  • Explain the difficulties in backtesting a VaR model
  • Describe the risks associated with public and private fund investing
  • Define credit risk and explain the components of credit risk evaluation
  • Describe quantitative measurements and factors of credit risk, including probability of default, loss given default, exposure at default, expected loss and time horizon
  • Define liquidity risk and identify the factors that contribute to liquidity risk
  • Compare Basel III to the previous Basel Accords
  • Compare and contrast Basel III to Dodd-Frank and other global financial legislation
  • Describe the Basel Committee’s seven categories of operational risk
  • Define model risk; identify and describe sources of model risk
  • Describe the challenges involved with quantifying model risk
  • Explain different approaches for calculating regulatory capital
  • Distinguish between regulatory and economic capital
  • Describe the RAROC methodology and its benefits

Duration:  Three days

Program Level:  Basic

Prerequisites:  There are no prerequisites

 

Outline/Topics:

Day 1
  • Introduction
    • Defining risk
    • Impacts of risk
    • Types of risk
    • Risk, uncertainty and reward
    • Brief history of major failures in risk management
  • What risk means to:
    • Commercial banks
    • Investment banks
    • Insurance companies
    • Pension plans
    • Mutual funds
    • Hedge funds
  • Volatility, correlation, statistical risk measures
  • Focus on Value at Risk (VaR)
  • Equity Risk
  • Fixed income risks
  • Derivatives risks
  • Foreign exchange risk
Day 2
  • Investment Fund Risks
  • Trading and Execution Risk
  • Liquidity & Market Risk
  • Credit Risk
  • Credit Value at Risk
Day 3
  • Regulatory frameworks
  • Operational Risk
  • Model Risk
  • Economic Capital and RAROC

For a detailed outline and additional information on this course or to find out about our other courses, contact us at (646) 244-5190 or info@financeiq.net!

Anti-Money Laundering

Money laundering is the process that criminals use to disguise the true origin of cash by introducing it into legitimate businesses and systems.  While its origins date back centuries, today it has grown in sophistication, size and speed with the advancement of technology and globalization.  In response to this, individual financial institutions, regulators and governments have taken measures to combat this serious issue. This one day introductory course will explain what money laundering is, who the main participants are, the methodologies and processes used, and the ways in which it is being addressed.

Learning Objectives

Outline/Topics:

  • Define money laundering and explain why it exists
  • Explain the process of money laundering as well as the markets and systems used
  • Identify key players in this activity
  • Explain what financial institutions are doing to combat this crime
  • Describe laws and regulations that address money laundering

Duration:  One day

Program Level:  Basic

Prerequisites:  There are no prerequisites

CPE:  7.0 CPE Credits

1 Day Program
  • Introduction
    • Definition of money laundering
    • Motivation of offenders
    • Criminal activity
    • Tax avoidance
    • Legitimacy
    • Money laundering lifecycle
  • Preventative Measures
    • Know Your Customer
    • Due diligence
    • Compliance Officer
    • Establishing key personnel
    • Policies, procedures, internal controls
    • Three lines of defense
  • Controls at the business unit level
    • Management action triggers
  • Training
  • Technology
  • Regulations
    • Bank Secrecy Act
    • FINRA Rule 3310
    • Patriot Act, Title III
    • Office of Foreign Assets control (OFAC)
    • Sanctions
  • Summary and Questions

For a detailed outline and additional information on this course or to find out about our other courses, contact us at (646) 244-5190 or info@financeiq.net!

Credit Risk Management

This one day program offers participants a thorough introduction to the concepts and tools that will assist them in understanding credit risk and risk management.   The course also introduces participants to the framework for conducting credit analysis and the basic elements of projecting financial statements as well as modern techniques for mitigating this risk.

Learning Objectives

Outline/Topics:

  • Establish a structured framework for credit risk analysis
  • Evaluate a firm’s market position, competitive strengths, weaknesses, and ability to execute on a business strategy
  • Evaluate the debt structure of a company and its collateral base
  • Identify significant areas of risk in a firm’s financial statements
  • Calculate and interpret key ratios used to evaluate a firm’s creditworthiness
  • Analyze cash flows to evaluate the repayment prospects of a firm
  • Understand methods for mitigating credit risk

Duration:  One day

Program Level:  Basic

Prerequisites:  There are no prerequisites

CPE:  7.0 CPE Credits

1 Day Program
  • Introduction to Credit Analysis
    • Role of credit risk analysis
    • Framework for credit risk analysis
    • Rating agencies’ methodologies
    • Regulatory considerations
  • Debt Structure Analysis
    • Composition of capital structure
    • Debt instruments, commitments and arrangements
    • Off-balance sheet items
    • Sources and uses of cash
    • Credit agreement basics
  • Business and Industry Analysis
  • Ratio Analysis
  • Credit Risk Management
    • Collateral
    • Reserves
    • Credit Value Adjustments
    • Early termination
    • Risk monitoring
  • Summary and Questions

For a detailed outline and additional information on this course or to find out about our other courses, contact us at (646) 244-5190 or info@financeiq.net!

Best Practices and Pitfalls of Corporate Governance

This one day program will focus on the best practices and current challenges of corporate governance in the post crisis world. The emphasis in this class will be on identifying the failures of corporate governance in the recent past, challenges to effective corporate governance in today’s market and best practices of effective corporate governance. Particular emphasis will be placed on latest developments and practical applications. The course will introduce two case studies that will examine the pre- and post-crisis firms’ governance and will have practical exercises throughout to emphasize governance techniques.

Learning Objectives

Outline/Topics:

  • Identify the competing elements involved in corporate governance
  • Explain the principal reasons behind past failures
  • Distinguish among the requirements of both the Board of Directors and company management in establishing effective corporate governance practices
  • Describe post-crisis best practices for corporate governance policies and procedures
  • Explain how corporate governance practices influence shareholder rights

Duration:  One day

Program Level:  Basic

Prerequisites:  There are no prerequisites

CPE:  7.0 CPE Credits

1 Day Program
  • What is corporate governance
  • Competing elements and the role of corporate governance
  • Corporate governance pre and post crisis
  • Role of the Board of Directors
    • Board committees
    • Functions and best practices
  • Role of Management
    • Role & responsibilities
  • Implementing a Code of Ethics
  • Corporate Transparency
  • Executive Compensation
  • Communications with shareholders
  • Financial Firms and Corporate Governance
    • Organizational structure
    • Compliance
    • Control
    • Senior management
    • Risk management
    • Other stakeholders
  • Role of the Regulators
    • Response to global financial crisis
    • Current viewpoints and strategies
    • Mandating information
    • Latest developments
  • What and Who Affects Corporate Governance
  • Policies and Procedures
    • Best practices
    • Clear guidelines
    • Non conflicting job descriptions
    • “Dotted lines”
    • Escalation procedures
    • Monitoring
  • Summary and Questions

For a detailed outline and additional information on this course or to find out about our other courses, contact us at (646) 244-5190 or info@financeiq.net!

Key Risk Indicators

This one day program will focus on Key Risk Indicators (KRI) and the best practices for their effective use. The course will define and compare KRIs to Key Performance Indicators and their practical applications.  The monitoring and value assessment of KRIs will also be examined as the use of this risk management tool is constantly a work in motion

Learning Objectives

Outline/Topics:

  • Define a Key Risk Indicator
  • Explain the difference between KRIs and Key Performance Indicators
  • Discuss root causes as they relate to KRIs
  • Explain the framework for developing KRIs
  • Describe challenges in developing KRIs
  • Identify characteristics of successful KRIs
  • Identify sources of information
  • Assess KRI monitoring, communication and value

Duration:  One day

Program Level:  Basic

Prerequisites:  There are no prerequisites

CPE:  7.0 CPE Credits

1 Day Program
  • What are Key Risk Indicators?
    • Relationship to KPIs
    • Common challenges
    • KRIs as leading indicators
    • Root cause events
    • Intermediate events
  • KRI Framework
  • Risk Appetite
  • Defining and maintaining a KRI framework
  • Selecting KRIs
  • Linking objectives and strategies to risks
  • KRIs as a strategic management tool
  • Core Elements of Well-Designed KRIs
  • Sources of Information
  • Guidelines for Best Practices
  • Common KRIs for financial firms
  • Communication and Reporting
  • Procedures and policies
  • Summary and Questions

For a detailed outline and additional information on this course or to find out about our other courses, contact us at (646) 244-5190 or info@financeiq.net!

Enterprise Risk Management

Risks arise in almost every part of an organization and risk management has emerged as one of the most important challenges facing clearing agencies today. This one day course provides participants with a comprehensive framework for identifying and assessing exposures within an organization.  In reviewing the main types of risk, participants will learn the principal assessment tools and approaches to how exposures can be effectively managed.

Learning Objectives

Outline/Topics:

  • Define risk and explain enterprise risk management
  • Identify major types of risk within a clearing agency
  • Describe a framework for enterprise risk management and the role it serves in an organization
  • Describe the implications that a defined risk culture has on corporate governance
  • Discuss risk assessment tools and measurement techniques
  • Describe various risk controls in an organization
  • Distinguish among activities related to risk transfer, exclusion or reduction

Duration:  One day

Program Level:  Basic

Prerequisites:  There are no prerequisites

CPE:  7.0 CPE Credits

1 Day Program
  • Defining risk
    • Impacts of risk
    • Types of risk
    • Risk, uncertainty and reward
    • Brief history of major failures in risk management
  • Business Strategy and Risk Coverage
    • Credit
    • Liquidity
    • Strategic/Business/Reputation
    • Market
    • Operational
    • Compliance/Legal/Regulatory
    • Financial
  • Risk Appetite Framework
    • Linkage to business strategies and objectives
    • Principals of risk management
    • Risk management framework
    • Architecture
    • Strategy and objectives
    • What is a risk culture?
    • Risk culture and risk strategy statement
    • Implications for Corporate Governance
    • Risk-related policies
  • Measurement and Assessment
    • Approaches and methodologies
    • Measurement techniques
    • Risk classifications and matrix
    • Failure mode and effect analysis
  • Risk Controls
    • Lines of defense
    • Inherent vs residual risk
    • Features of a control environment
    • Types of controls
  • Summary and Questions

For a detailed outline and additional information on this course or to find out about our other courses, contact us at (646) 244-5190 or info@financeiq.net!

Liquidity Risk Management

This one day program provides qualified participants with an advanced look at modern market risk management as it pertains to liquidity.  Regulators, banks and investors are concerned about the current liquidity in marketplaces and the “unintended consequences” brought about by regulation.  Through the use of case studies and exercises, participants will gain an understanding of how to correctly identify market liquidity risk, how to quantify it and modern ways in which to mitigate them. In addition, the course will cover best practices of a modern risk management unit and how this unit works with the other stakeholders in an effort to monitor the risk as it changes and respond with a well-planned course of action.  An emphasis will be placed on risk management techniques, how they are used, their strengths and weaknesses and how they are changing.

Learning Objectives

Outline/Topics:

  • Identify and quantify market liquidity risk
  • Discuss approaches to monitor market liquidity risk
  • Identify and describe the main products used by risk management
  • Discuss modern quantitative and qualitative techniques used in market risk management
  • Create a scaled down risk report
  • Compute VAR as well as Expected Shortfall

Duration:  One day

Program Level:  Basic

Prerequisites:  There are no prerequisites

CPE:  7.0 CPE Credits

1 Day Program
  • Identifying Market Liquidity Risk
    • Qualitative factors
    • Quantitative factors
  • Exercise: Determining the liquidity risk of a portfolio
  • Identifying Funding Liquidity Risk
  • Exercise: Identify the main funding risks of the 2008 crisis
  • Liquidity Risk Management
    • Funding risk: market and infrastructure
    • Trading and dealing risk
    • Liquidity adjusted VAR
    • Market sources of liquidity
    • Management Action Triggers
    • Hedging products
  • Summary and Questions

For a detailed outline and additional information on this course or to find out about our other courses, contact us at (646) 244-5190 or info@financeiq.net!

Operational Risk Management

Operational risk is the potential of loss resulting from inadequate procedures, systems or policies. It can occur through human error, system failure, criminal activity or any event that disrupts business processes.  In addition to market risk and credit risk, the management of operational risk is a key challenge to financial institutions, the global markets and to regulators.  This one day course will explain what operational risk is in detail, ways in which to identify it, quantify it and mitigate it.  Through the use of examples and exercises the participant will gain a thorough introduction to this type of risk.

Learning Objectives

Outline/Topics:

  • Define operational risk
  • Explain the different types of operational risk
  • Describe how operational risk can be mitigated
  • Quantify the risks associated with operational risk
  • Discuss the importance of operational risk management and related regulations

Duration:  One day

Program Level:  Basic

Prerequisites:  There are no prerequisites

CPE:  7.0 CPE Credits

1 Day Program
  • Operational risk defined
    • Operational risk considerations
    • Operational risk management failures
  • How operational risk can change into other types of risk
  • Exercise: How can operational risk become market risk?
  • Types of Operational Risk
  • Systems
  • System failure and disruption
  • Transactional systems
  • Internal systems
  • Policies and procedures
  • Human error and fraud
  • External risks
    • Legal and reputation risks
  • Operational Risk Management
    • Risk management goals
  • Defining operational risk profile
  • Techniques
    • Modeling
    • Scenario analysis
    • Simulations
    • Stress tests
    • Qualitative oversight
    • Data collection
  • Operational Risk and Capital Requirements
    • Unexpected versus expected losses
    • Standardized approach and Advanced Management Approach
    • Regulatory capital allocation requirements
  • Summary and Questions

For a detailed outline and additional information on this course or to find out about our other courses, contact us at (646) 244-5190 or info@financeiq.net!

Operational Risk of Financial Derivatives

The evolution and establishment of credit derivatives in the last twenty years has made a significant impact on the world of finance, the global markets and the world in general.  Delivered by the former Chief Dealer and Head of Global Markets for American Express Bank, this course will provide participants with an in-depth examination of credit derivatives and their various structures and uses, as well as, an analysis of how they came to be a major component of the financial crisis. Through the use of exercises and case studies, participants will have the opportunity to understand the roles, uses, pricing and valuation in their respective markets today.

Learning Objectives

Outline/Topics:

  • Define operational risk
  • Identify how operational risk is manifested in OTC and exchange- traded derivatives
  • Evaluate how operational risk can materialize in the front, middle, and back offices of a derivatives group
  • Discuss different measurement approaches to operational risk
  • Evaluate best practices to control and monitor operational risk

Duration:  Two days

Program Level:  Basic

Prerequisites:  There are no prerequisites

CEP:  14.0 CPE Credits

Day 1
  • Defining and identifying operational risk
    • Sources of operational risk
      • People
      • Processes
      • Technology
      • External events
    • Regulatory influence
  • Life cycle of a financial derivative
    • Role of front, middle, and back offices
    • Pre-and post-trade activities
    • Confirmation and settlement processes
    • Evaluation of internal controls
    • Standards for reliability and soundness of back office
    • Reconciliation procedures
    • Resolution of disputed trades and discrepancies
    • Fraudulent trades and their prevention
Day 2
  • Measuring operational risk
    • Operational risk measurement models
    • Advantages and risks of operational risk measurement models
  • Controlling and Monitoring Operational Risk in Derivatives Portfolios
    • Best practices to control operational risk
    • Advantages and disadvantages to back offices structures
    • Financial regulations and their impact on the control of operational risk
    • Role of key personnel
    • Best practices in monitoring operational risk

For a detailed outline and additional information on this course or to find out about our other courses, contact us at (646) 244-5190 or info@financeiq.net!

Credit Risk of OTC Derivatives

In the last decade-and-a-half, over-the-counter (OTC) derivatives have grown from being relatively obscure financial products into standard risk management tools. Notwithstanding their commonplace standing today, establishing an effective risk management process for OTC derivatives remains a challenge for end-users, dealers, clearing agencies and other related parties. Additionally, Dodd-Frank and Basel III rules have changed the OTC derivatives landscape significantly. This two day course will focus on practical implementation issues for establishing an effective risk management framework in an uncertain, global regulatory environment.

Learning Objectives

  • Define credit risk
  • Identify credit risk in OTC FX, Interest Rate, and Equity Derivatives
  • Evaluate credit risk measurement methodologies
  • Identify basic capital regulatory requirements

Duration:  Two days

Program Level:  Basic

Prerequisites:  There are no prerequisites

CEP:  14.0 CPE Credits

  • Describe the mechanics of major credit derivatives
  • Describe an effective risk management framework for addressing credit risk in OTC derivatives
  • Identify and describe credit risk management monitoring practices

Outline/Topics:

Day 1
  • Derivatives and the Evolving Role of the Credit Risk Manager
  • Statistics Review
  • Credit Risk in Derivatives
Day 2
    • Measuring credit risk
    • Controlling credit risk
    • Monitoring credit risk in derivatives
  • Summary and Questions

For a detailed outline and additional information on this course or to find out about our other courses, contact us at (646) 244-5190 or info@financeiq.net!