Course description
Associate PRM™ Certificate
This course is an intensive seminar designed to prepare participants for the Associate PRM™ Certificate.
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Suitability - Who should attend?
Who Should Attend
The program is intended for everyone studying to for the Associate PRM™ Certificate. This qualification is intended for staff entering the risk management profession, or for those who interface with risk management disciplines on a regular basis, such as auditing, accounting, legal, and systems development personnel who want to understand fundamental risk management methods and practices.
Prerequisites
A basic knowledge of finance.
Outcome / Qualification etc.
CPD: 21 hours
Learning Outcomes
The key learning objectives of the Associate PRM™are to:
- Gain a familiarity with the concept of risk management and its place in the business, organization or system
- Gain an overall understanding of the concepts of risk management techniques in a non-quantitative framework
- Understand how governance fits into the concept of risk management
- Understand the concepts of risk and return
- Gain a familiarity with the structure and workings of various financial markets
- Gain a familiarity with the financial instruments used in risk management
- Understand the concepts of interest rate risk and hedging
- Understand the concepts of asset –liability management
- Understand the concepts of market risk management
- Understand the concepts of retail and commercial credit risk management
- Understand the concepts of operational risk management
- Understand how performance can be measured
- Understand the concept of enterprise risk management
- Understand industry standards and best practices of financial risk management
- Understand the positive role that risk management can play
Attending this course will help prepare you for the Associate PRM™ Certificate exam.
Training Course Content
Section A: Risk Management, Risk and Return
- Definition of financial risk
- Role of the risk manager
- Risk terminology
- Types of risk: Market, Credit, Operational, Reputational, Legal, Business, Liquidity
- The balance between risk and reward
- Risk-adjusted returns
- Implementing a financial risk management program
- Hedge accounting
- Hedging at Merck
- Diversification
- Portfolio theory
- The efficient frontier
- The value of a call option
- Risk-adjusted returns
Section B: Governance and PRMIA Standards
- Importance of governance
- Role of the Board of Directors
- Typical financial risk management structure
- Basic risk management policies
- Importance and meaning of an Escalation Policy
- Role of external parties (external audit, regulators, “the market”)
- The ten core PRMIA Governance Principles
- How the PRMIA Governance Principles apply to the Board, the finance and accounting function, and the risk management department
- PRMIA Standards of Best Practice, Conduct and Ethics for Professional Risk Managers
- Positive role of risk management in the business process
- Basic operations of the PRMIA organization and practices
Section C: Financial Markets
- Money markets
- Bond markets
- Stock markets
- Foreign exchange markets
- Futures markets
- OTC markets
- Commodities markets
- Energy markets
Section D: Interest Rate Risk and Hedging
- Definition of interest rate risk
- Yields and bond prices
- The yield curve and bond prices
- Duration and convexity
- Risk of a single security
- Portfolio risk
- Principles of swaps
- Principles of options
- Caps and floors
- Swaptions
- Exotic options
- Financial engineering
Section E: Market Risk Management and ALM
- Notional amounts of exposure
- Option “Greeks”
- The concept of Value at Risk (VaR)
- Value at Risk and risk limits
- Determining Value at Risk measures
- When VaR doesn’t work
- Stress testing and extreme events
- Scenario planning
- Liquidity risk
- Role of the ALCO
- Funding gaps
- Duration gaps
- Liquidity risk in banks
- Funds Transfer Pricing (FTP)
Section F: Retail and Commercial Credit Risk Management
- Role of the credit officer
- Retail credit risk
- Credit scoring
- Default, default rates and loss rates
- The value of a customer
- Securitization and risk transfer
- Pricing risk
- Role of rating agencies
- Credit ratings
- Migration of credit ratings
- Internal rating scores and methods
- Basic financial measures in a loan risk assessment
- Loss Given Default (LGD)
- Counterparty credit risk
- Credit models
- Risk of a single credit
- Portfolio credit risk
- Credit VaR
- CreditMetrics
- MKMV models
- Actuarial and reduced-form models
- Overview of credit derivatives
Section G: Operational Risk Management and Performance Measures
- Operational loss
- Quantifying operational loss
- Link between operational and other risks
- Key risk indicator
- Key risk driver
- Differentiating between a key risk indicator and a key risk driver
- Framework for analysing operational risk
- Implementing an operational risk framework
- Implementing a scenario-based process for assessing and quantifying operational risks
- Assessing risks from new business processes, products or change management initiatives
- Mitigation and mitigation techniques
- Role of insurance in operational risk transfer
- Risk capital
- Core uses of risk capital
- Risk capital vs. regulatory capital
- RAROC
- Uses of RAROC in business decision making
Section H: Case Studies
- Metallgesellschaft
- Orange County
- Riggs Bank
- LTCM
- Continental / Penn Square
- Bankgesellschaft Berlin
- Credit Lyonnais
- NAB FX Options
- Barings Bank
- WorldCom
- Banker’s Trust
- Daiwa
- G30 Report and Recommendations
- Governance lessons
- Market risk lessons
- ALM lessons
- Market risk lessons
- Credit risk lessons
- Operational risk lessons
- Governance lessons
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Average rating 5
The teaching method was superb, particularly in the art of transferring immediate usable knowledge. – Frances N.
Expenses
- London: £2,700 (plus VAT)
- New York: $3,400
The overview was excellent – right balance for his audience – to address everyone's need." – Dorothy M.