Training center

Course: Managing Financial Market Operations: How to Decrease customers’ Failure Risks and avoid a threat to financial institution (4 hrs seminar)

Ongoing changes in banking regulation focus on balance restrictions. This should reduce system risks levels from finance, lessen their impact and not to allow crisis become a catastrophe. But in every actual case of risk a particular deal, customer or factor is involved. Risk events are specific too in terms of possible impacts and possible managerial decisions. Regulating agencies’ methods for finance are too generic.

Banks use limit-based systems to proactively hedge risks. This seminar is a discussion of principles and methods for organizing limit systems, how limits should be set, how they are connected with balance requirements. An example of how to establish a customer limit when dealing in derivatives for assorted assets will be given.

Main program issues

• “Lines of defense” against risks: business processes, limit systems, analysis of risks before and after operations.
• Credit organizations’ operations considered as a technological process: business processes, descriptions, requirements; options for distributing functions and their evaluation vis-a-vis effective hedging and financial payout.
• Building a limits system: kinds of limits (customer, risk factor, instrument, operation, estimation limits), computation of limits, what risks limits can help counter.
• Limit determination: Risk appetite declaration, limit value finding, cascading goals down to specific operations, analysis of limits’ bearing on overall risk.