Course description
Basel III is a global regulatory standard on bank capital adequacy, It is an international regulatory accord that introduced a set of reforms designed to improve the regulation, supervision and risk management within the banking sector.
This training course provides a comprehensive overview of not only what the past, present and likely future rules are, and how they apply to different institutions, but also what their underlying purpose is, why they have evolved in the way they have, and how banks can adopt optimal strategies to maximise their profits and minimise risk whilst at the same time staying fully compliant with the spirit and the letter of the rules.
The overall goal of this Five-day course is to provide participants with a general overview of current financial regulation under the Basel Accords.
We achieve this by a combination of theory and practice, including case studies from financial institutions, as well as reviewing the actual regulatory documents from the Basel Committee for Banking Supervision (BCBS), the European Banking Authority (EBA), the EU Capital Requirements Regulation (CRR) and Capital Requirements Directive IV (CRD IV)
Upcoming start dates
Upcoming start dates
Suitability - Who should attend?
The Bank Capital Adequacy Under Basel III Course is suitable for:
- Risk managers, regulators, internal auditors, bankers and analysts, but is also appropriate for a broader audience who wish to gain insight into capital adequacy and its importance for banks.
- It is targeted at an intermediate level and assumes only a basic understanding of accounting, financial products and banking functions.
Outcome / Qualification etc.
The Bank Capital Adequacy Under Basel III Training Course will:
- Explain the purpose, principles, evolution and application of the Basel Capital Adequacy regulations and what is required in terms of:
- regulatory capital
- risk weighted assets
- Capital Adequacy ratios
- Enable participants to apply the Basel Capital Adequacy rules to specific banks
- Understand how the institutions of the Basel Committee for Banking Supervision (BCBS) and the European Banking Authority (EBA) operate and what the shape of future European banking regulation will look like
- Examine how banking risk remains despite regulation and how banks can and do organise their strategy in the context of Basel Capital Adequacy regulations
Training Course Content
Day 1
Financial Regulation
- Financial regulation: Is it possible?
- The Bank for International Settlements (BIS)
- The Basel Committee for Banking Supervision (BCBS)
- Minimum Capital Requirements
- Risk-weighted assets and regulatory capital
- The three accords: Basel, Basel II, Basel III
- The three pillars: Pillar I, Pillar II, Pillar III
- The three risks: Credit, market and operational
Day 2
The Anatomy of the Basel Accords
- Guided tour of the BIS, BCBS and the EBA websites
- Basel II: International Convergence of Capital Measurement and Capital Standards: A Revised Framework (bcbs128).
- Basel III: A global regulatory framework for more resilient banks and banking systems (bcbs189).
- Capital Requirements Regulation (575/2013) (CRR)
- Capital Requirements Directive (2013/36/EU) (CRD)
- EBA Report: On Credit Valuation Adjustment (CVA) under CRR Article 456(2)
Day 3
Credit Risk
- What is credit risk?
- The three key elements of credit risk:
- EAD, LGD, PD
- The three approaches:
- The standardized approach (SA)
- The foundation internal ratings based approach (FIRB)
- The advanced internal ratings based approach (AIRB)
- Excel lab:Computing FIRB and AIRB ourselves
- Revisions to the standardised approach for credit risk (d347).
Day 4
Advanced Credit Risk
- Specific exposures: Derivatives, contingent exposures, securitization, covered bonds
- Credit risk mitigation techniques
- Netting, collateral, credit derivatives
- Counterparty Credit Risk in Basel III
- Credit valuation adjustments (CVA)
- Future developments: Basel IV, FRTB
- Excel lab:The CVA of an interest rate swap
- Review of the credit valuation adjustment risk framework (d325).
Day 5
Operational Risk
- What is operational risk?
- The basic indicator approach (BIA)
- The standardized approach (SA)
- The advanced models approach (AMA)
- Standardised measurement approach for operational risk (d355).
- Liquidity monitoring tools
- Basel III: The liquidity coverage ratio and liquidity risk monitoring tools (bcbs238).
- Basel III: The net stable funding ratio (d295).
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