Basel Regulations and Operational Risk Management
Financial services professionals, consultants, and sales professionals interested in providing or selling products and services to banks and other financial institutions, and everyone interested in knowing about credit and operational risk exposure to banks and capital requirements to cover those risks in light of the Basel framework
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Operational risk is a significant risk that banks and other financial institutions face. Basel regulations, specifically Basel II, have established principles and guidelines for holding adequate capital to cover losses that arise from operational risk events. There are two broad categories of operational risk activities: measurement and management. Operational risk measurement involves quantitative assessment of operational risk and is used for determining regulatory capital. On the other hand, operational risk management involves a qualitative assessment of operational risk and a system to manage that. A successful operational risk program under Basel II combines quantitative and qualitative approaches to ensure operational risk is effectively measured and managed.
This course discusses various aspects of operational risk management and measurement as outlined in Basel II regulations. It identifies key operational risk events and sources, and common risk measurement methods. It then introduces aspects of the operational risk management framework and Basel II principles for managing operational risk in banks. These principles deal with developing an operational risk management environment, as well as the governance, continuity, and disclosure of operational risk in banks.
- recognize key banking risks addressed in Basel regulations
- identify operational risk elements in Basel II
- identify operational risk capital charge measurement approaches
- recognize characteristics of operational risk
Operational Risk Management
- identify aspects of the Basel operational risk management framework
- identify fundamental principles for developing an operational risk management environment
- identify aspects of governance, continuity, and disclosure in Basel II
- recognize the characteristics of an operational risk management framework