Training

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8th - 10th of May, 2018 | Kuala Lumpur

 Learn a Multi-dimensional Approach to Effectively Design and Conduct Operational Risk Stress Tests
 Current Regulatory Standards
 Expectations for Operational Risk Measurement
 Select and Use Appropriate Approaches for Operational Risk Analysis
 Understanding the Data and System Limitations
About the Course Why you
In December 2017, the BCBS published its revised principles
for sound stress testing, recognizing that stress testing has should not
become a critical element of risk management and decision-
making for banks, and a core tool for banking supervisors miss this
and macroprudential authorities. This emphasis on forward-
looking risk metrics is particularly significant for operational course?
risk, now that Basel III has abandoned AMA methods for In order to address these
calculating operational risk capital. Meeting the BCBS stress challenges, this course will enable
testing standards for operational risk presents many banks you to:
with a huge challenge, due to lack of established methods,
data scarcity and inconsistency, and fragmented systems.
 Identify today’s most significant
operational risks, according
to supervisory thinking and
industry ranking, and how they
Who should attend? are interconnected
 Familiarize yourself with the
This course would benefit: Risk Professionals at Operational current regulatory standards
and overall Organizational level, Financial Planning, Risk and expectations for
Auditors, Members of Risk and Audit Committees, Regulatory operational risk measurement
Reporting, IT Directors and IT Operations Managers,
Statisticians and Actuaries Involved in Risk Reporting.  Recognize the multiple
organizational roles in
operational risk measurement
and management

Meet Our Course  Select and use appropriate

approaches for operational risk
Director analysis and measurement,
taking into consideration data
Dr. Steve Lindo
and systems limitations
Steve Lindo is a financial risk manager  Understand the objectives and
with over 30 years’ experience managing parameters of operational risk
risks in trading portfolios, banking, funding stress testing
and ALM. His current role is Principal of SRL Advisory
Services, an independent consulting firm specializing  Use established methodologies
in risk governance, education and strategy, risk data to develop and analyse
management, regulatory expertise and information risk operational risk scenarios
management. His previous positions include Director of  Use a disciplined, multi-
Treasury Management and Mortgage Risk at Fifth Third dimensional approach to
Bancorp and Vice President of Risk Capital Management at effectively design and conduct
GMAC Financial Services LLC (now Ally Financial) operational risk stress tests
Specialties: Define and develop risk management  Practice these techniques
standards, concepts and programs designed to establish in operational risk scenario
risk management competency and culture across functions development and stress testing
and sectors. Define organizational risk appetite, design and case studies
implement risk policies, governance, systems, statistical
models and teams of professionals. Analyze, approve and
communicate complex risks to stakeholders. Fluent spoken
and written French, German, Spanish and Portuguese.
 Course Outline
The following may change in terms of timing and content depending on the attendees identified needs and industries represented;

DAY 1
8:30 Arrival & coffee Session 4:
Introduction to Day 3's Scenario and Stress
9:00 Housekeeping & Interactive Introductions Test Case Studies
• Why stress testing has become the cornerstone
9:30 Session 1: of banking risk management, decision making
The Principal Types of Operational Risks and supervision
and Threats • The unique requirements for operational risk
• Intrinsic operational risks recognized by the stress testing
BCBS, with examples • Scenario development Do’s and Don’ts
• Other intrinsic operational risks ranked highly in • Preview of Day 3 scenario development and
industry surveys, with examples stress test design case studies
• Extrinsic operational risks, with examples
17:00 Wrap Up Day One
10:30 Coffee and Break

Session 2:
Interconnection of Operational Risks
• Operational risks which trigger other operational
risks:
o Internal control -> Fraud risk
o Outsourcing -> Cyber risk
o Fraud -> Legal risk
o Conduct -> Reputation risk
o Technology -> Compliance risk
o Complexity -> Strategic risk
• Examples of the above

12:30 Lunch & Prayers

13:30 Session 3:
The Four Methods of Operational Risk
Measurement and Analysis
• Taking into consideration data and systems
limitations
1) Statistical analysis of empirical data
2) Statistical analysis of expert-generated data
3) Expert judgement
4) Structured risk analysis
• Examples of the above

15:30 Coffee Break

www.fleming.events tel.: +603 2272 5360 mob.: +60178841507 email: [email protected]

 Course Outline
The following may change in terms of timing and content depending on the attendees identified needs and industries represented;

DAY 2
8:30 Arrival & coffee 16:00 Session 8:
Operational Risk Stress Test Design
9:00 Session 5: • Established approach
Regulatory and Supervisory Requirements • Project management
• Current standards • Analysis
o Operational risk capital [BCBS 424]
o Stress testing [BCBS 428] 17:00 Wrap Up Day Two
o Supervisory expectations

10:30 Coffee Break

11:00 Session 6:
Organizational roles in operational risk
management
• Three lines of defence for operational risk
• Roles and responsibilities
o First line
o Second line
o Third line

12:30 Lunch & Prayer

13:30 Session 7:
Operational Risk Scenario Development
Established approaches
• High-impact, low probability
• What if
• Reverse stress test
Benefits of these approaches
• Transparency
• Intellectual rigor
• Reinforce hard evidence
• Expose biases
• Isolate organizational interference
• Cross-functional collaboration
Methods

15:30 Coffee Break

www.fleming.events tel.: +603 2272 5360 mob.: +60178841507 email: [email protected]

 Course Outline
The following may change in terms of timing and content depending on the attendees identified needs and industries represented;

DAY 3
8:30 Arrival & coffee

9:00 Session 9:
Scenario Development Case Study
Scenario explanation and selection
1. Internal control breakdown
2. Outsourcing
3. Conduct
4. Technology
Small groups
• Use provided template to develop scenario

10:30 Coffee Break

11:00 Session 10:

Conducting Operational Risk Stress Tests
Established approach
• Prepare and plan
• Communicate
• Assess, correct, fine-tune
• Analyse and document
• Circulate results and conclusions

12:30 Lunch & Prayer

13:30 Session 11:

Stress Test Design Case Study
Select scenario
Small groups
• Use provided template to design stress test
• Define objectives
• Assign roles and responsibilities
• Analyse data
• Draw conclusions

15:30 Coffee Break

16:00 Session 12:

Key Course Takeaways

17:00 End of The Course

www.fleming.events tel.: +603 2272 5360 mob.: +60178841507 email: [email protected]

 Stress Testing and Scenario Analysis in Operational Risk
8th - 10th of May, 2018 | Kuala Lumpur

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