Banking Courses by GRMG

coursescommercialbanking

Bank Financial

Risk

Management, Gl

obal

Banking and Ca

pital

Markets, Value

at

Risk, Bank Ass

et and

Liability Mana

gement

Global Risk Management Group Ltd offers a range of practi-

cally focused courses in commercial Banking field.

These courses designed to equip you with the skills and knowl-

edge needed for a successful career as well as the qualifications

to lift you above other candidates in the job market.

We have developed an extensive range of high quality

banking training courses.

Thorough these courses the participants are introduced to vari-

ous types of essential of banking, various types of risk in bank-

ing operation, Bank asset and liability management. Please find

below the details of the courses:


Bank Asset and Liability Management

Bank Risk Management

Credit Portfolio Risk Management

Credit Risk Management for bankers

How to manage Operational Risk

Market Risk

Money and Banking

Risk Management in commercial banks

– Overview of Basel II

Bank Financial Risk Management

Credit Risk Management

Essentials of Banking

Global Banking and Capital Markets

Management of risk- Basic

Modern Banking

Overview of Banking

Value at Risk

Bank Asset and Liability Management3 Days

OverviewThis program has been developed primarily for banks to provide an executive level understanding of assets and Liabilities Management and covering all the es-sential aspects of ALM. The program covers imple-menting of Basel II and Latest ALM techniques.

Key Topics Covered • ALCO Policy statement • Capital allocation • Basel II • Funds transfer pricing • Managing risk • Hedging risk • Building an effective ALCO • Profit maximisation

Key Benefits The course provides a global overview of ALM in which delegates:• Appreciate how successful ALM affects day-to-day

decisions throughout the bank • See how Alco policy statement could be effective • See how key decisions interact • Learn about the latest techniques for managing

bank capital

Explore how bank divisions interact• Recognise the impact of Basel II • Determine the essential drivers of bank profitability Put all the principles into dynamic practice with Glo-bal Banker – the most sophisticated banking simula-tion available

Content

Risk Management• Identifying risks • Credit risk • Interest-rate risk – mismatch, gap risk, yield curve

risk • Liquidity risk • Currency risk • Duration risk • Operational risk • Quantifying risk exposures

• Controlling risk through pro-active risk management

• Hedging techniques using interest rate swaps and credit default swaps

• The Value-at-Risk (VAR) approach

Bank financial Management • Balance sheet structures • On- and off-balance sheet accounts • Interest rate risk measures • Securitisation • Regulatory requirements • Capital adequacy • Liquidity requirement

Lending Policy• Retail vs. corporate • Syndicated loans • Floating rate vs. fixed rate • Pricing • Risk assessment • Marketing • Establishing acceptable levels

of risk-adjusted return • Achieving the right lending mix

Financing Policy• Retail vs. money-market funding • Competing for retail deposits • Marketing • Minimising costs of money

market funding

Raising money market funds• Timing • Liquidity

Treasury Management• Using money market instruments –

bills, CDs, commercial paper and bonds • Using derivative instruments –

futures, options, FRAs and swaps • Controlling risk • Managing cash flows and liquidity • Investment management

Capital Management • Raising capital • Debt vs. equity vs. hybrid instruments • Floating rate vs. fixed rate debt • Callable bonds• Convertibles, equities

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• Measuring the cost of capital • RAROC • Capital allocationSecuritisation of assets

Asset and Liability Management• ALM concepts • Implementing the ALM approach • Role, responsibilities and functioning of an

ALCO • Gathering data to support the ALCO • Integrating total bank operations – credit,

finance, • Trading, treasury and risk management • Establishing profit-centres • Measuring profit-centre contribution • Funds transfer pricing

Regulatory Capital• Capital adequacy requirements • The impact of Basel II • The three-pillars • Credit risk • Market risk • Operational risk • Standardised approach vs. use of internal

models• Internal ratings-based assessments

Strategic InvestmentThe impact of technology • Internet banking operation • Telephone banking • Investing in systems to lower staff costs

Course FeesVAT to be included at the local rate, if appli-cable. Costs shown are per delegate inclusive of refreshments, lunches and seminar materi-als. Cost of accommodation is not included.GBP 3000

Certificates of Participation Certificates of participation are remitted to course participants upon request.

Bank Risk Management This program has been developed primarily for banks to provide an executive level under-standing of the risk management and all new risks associated with the banking industry.

Who should attendThe seminar is directed towards members of risk management groups as well as of financial controlling divisions, consultants and advisors active in providing services to financial institutions. It is also of inter-est for academics of financial departments who want to get a insight into the practical implementation of new concepts of risk and bank management.

Objective The delegates will gain • an understanding of innovative concepts

of integrated, risk-/return bank manage-ment, the knowledge of new methods of risk measurement and capital allocation in bank management

• the ability to develop the conceptual framework and a consistent risk-/return key ratio system for an integrated risk-/return management of the bank portfo-lio,

• an insight into an optimization algorithm to determine risk-/return optimum bank portfolios with respect to loss risk limita-tions from both, internal and a regulatory point of view.

Key contents• Integration of risk and return

management, • Integrated risk measurement of the bank

portfolio,• Optimization of the risk/return structure of

the bank portfolio,• Innovative approaches of risk/return ef-

ficient capital allocation,• Implementation in the business line man-

agement.Time 2 Days

Course FeesVAT to be included at the local rate, if appli-cable. Costs shown are per delegate inclu-sive of refreshments, lunches and seminar materials. Cost of accommodation is not included.GBP 2200


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Credit Portfolio Risk ManagementThis advanced course focuses on credit port-folio risk management techniques, examin-ing several of the models and approaches that have developed in the marketplace. It considers how credit derivatives and other risk mitigation methods can be used in the implementation of a credit portfolio risk management programme. There is a discus-sion of the relationship of credit risk to other risks faced by financial institutions – market risk, operational risk, liquidity risk etc. The course examines these risks and the associated management tools and techniques within the broader context of the Value at Risk (VaR) approach to integrated risk management. VaR is important because it has the support of the banking regulators as an acceptable basis for the development of internal models of risk analysis, the return on capital and capital adequacy. Finally, the course addresses the policy, practice and process issues that need to be part of an in-tegrated risk management programme within a financial institution.

Course Outline Day One

Overview & Concepts • Market environment • Deregulation • Technology • Risk management lessons • Market risk • Procter & Gamble • Bank of International Settlements & the • Qualifying for the • Operational risk • Barings & Allied Irish • Credit risk • Enron • Vivendi

Risk Management & the role of the regulators Regulators • Credit risk, capital & the • The Federal Reserve system

& the Bank of England • The Bank of International Settlements (BIS) • 1988 BIS Accord

• Capital rule making • Internal Risk Management • 1996 BIS Amendment • BIS standards • Internal models • The new accords for 2004 implementation • VaR models & integrated risk management

An Integrated View of Risk Management • Definition of risk • Market risk • Credit risk • Operational risk • Group of 30 (G-30) Policy

Recommendations

The Credit Cycle: Does it exist? • Historical evidence • Recent experiences • The credit cycle & interest rates –

interpretation

The Role of the Credit Rating Agencies • Concepts • Process • Methodology • The Issuer / The Issue • Credit Enhancement Limitations

Day Two

Internal Rating Systems • Exposure, default probability

& expected loss • Default probabilities & recovery • Policies, structure, process • Role of agency ratings • Credit ratings & Risk-Adjusted Return on

Capital (RAROC)

Internal Risk Rating Systems • Exposure, Probability of Default, and

Expected Loss • Default Probabilities & Recovery Rates • Financial Assessment • Qualitative Factors • Industry Analysis • Third party support • Term, Structure & Collateral • Ratings, Pricing, Return on Capital & Eco-

nomic Capital • Measuring Risk: The Value-at-Risk (VaR)

Approach • Traditional approaches • Notional amount

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• Value of a basis point and duration (bond market)

• Value-at-Risk concept • Definition of VaR • Specified maximum loss • Specified time period • Specified probability • Calculating VaR • Variance-covariance approach • Monte Carlo approach • Historical simulation • Advantages & disadvantages

Modern Portfolio Management Techniques -– Overview • Modern Portfolio Concepts • The efficient frontier • Risk and return – Single asset risk versus

portfolio risk Covariation, Correlation & Port-folio Risk

• Portfolio diversification • Portfolio risk & return • Marginal risk contribution of an individual

asset

Credit Risk Management - VaR Approach • Definition of Credit VaR • Return distribution: credit vs. security • Credit VaR & the capital charge • Expected loss, unexpected loss & economic

capital

An Options Theoretic Model of Credit Risk • Conceptual building blocks • The option approach to credit • Equity – a call option the firm’s asset value • Estimating default risk Practical Application: The KMV Model • Definition of Expected Default Frequency

(EDF) • Addressing the non-normality issue

Day Tree

A Credit Migration Model of Credit Risk: The CreditMetrics Model • The transition matrix • Defining a credit rating system • Establishing transition & default probability

distributions • Determining a forward discount curve • Determining the capital charge

An Actuarial Model of Credit Risk: CreditRisk • Characteristics of the default probability

distribution • Advantages & disadvantages Credit Portfolio Risk Management Techniques • Secondary market trading- ISDA & standard-

ized credit documents • Asset securitization • Hedging

Credit Derivatives • Total Return Swap • Credit Swap • Credit Spread Options

Operational Risk • Definition of Operational Risk • Significance of Operational Risk • Measuring Operational Risk • An Operational Risk Measurement Process • Operational Risk VaR

Integrated Risk Management Revisited • Interrelationships among Market risk, Credit

risk, Operational risk • Credit risk & market risk • Credit risk & operational risk • Credit risk & liquidity risk

Internal Risk Management Organization • Life cycle of risk management- From limits to

RAROC • Policy / Infrastructure/ Process Systems &

technology

Credit Portfolio Risk Management and Risk-adjusted Return on Capital • Regulatory capital • Economic capital • Risk-adjusted return • Risk-adjusted capital • Risk-adjusted return on risk-adjust capital • Looking forward

Course FeesVAT to be included at the local rate, if applica-ble. Costs shown are per delegate inclusive of refreshments, lunches and seminar materials. Cost of accommodation is not included.GBP 3000


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Credit Risk Management for bankersOverview:This comprehensive four-day course on credit risk management is designed to give par-ticipants the skills and strategies to manage lending portfolios as they face new challenges. This involves keeping abreast of the latest techniques in cash flow and ration analysis, forecasting, pricing, portfolio management, financial restructuring, valuation and financial distress analysis.

Fundamental of Operational Risk Participants will be equipped to:• Understand the role data plays as the basic

element of any operational risk program • Categorize and index loss data • Integrate different types of operational risk

loss data into a single framework • Analyze internal and external loss data from

a variety of perspectives

Who should attend ?This course is designed for senior financial serv-ice professionals who may be new to the opera-tional risk discipline, junior risk professionals with limited or no experience with operational risk, or more experienced auditors, controllers, or risk professionals from other risk disciplines who may not have been exposed directly to operational risk principles and practice.

Course outline

Managing Operational Risk• The long view of operational risk: where we

have come from and where we are going • The characteristics of operational risk and

how it differs from credit and market risk • Regulatory developments and how Basel has

impacted the discipline of managing, mitigat-ing and measuring operational risk

• A historical perspective on definitional issues and why they matter

Loss Data• Why collect internal data and what it can tell

us about an institution • Industry standards for building loss data-

bases • Introduction and history of BIS operational

risk indexing categories (business units and event type)

• Identification of existing sources of historical loss data

• Capturing and classifying losses • Mapping of internal losses to BIS data hierar-

chies • Qualitative case analysis of external loss

events, including attention to determin-ing the internal control environment of the event, and how to glean lessons learned and relevancy for one’s own organization

• Using external data as the basis for establish-ing a best practices program

Self Assesment• Overview of key approaches to self assess-

ment programs • Determining the proper structure and sce-

narios for a self-assessment program • The risk assessment workshop vs. other

approaches (self-guided questionnaires, scorecards, interviews)

• Using case studies as content for informing the self assessment process

• Creating a self-assessment questionnaire and determining appropriate issues and risks to track

• Creating action plans based on assessing the effectiveness of controls

• Establish key risk indicators through the identification and monitoring of key internal data

Capital Calculation & Modeling• History of quantitative approaches to mod-

eling operational risk • Introduction to Operational Risk Value-at-

Risk (VAR) • Overview of operational risk capital require-

ments • Creating quantitative values from qualitative

inputs • Modeling scenarios based on self-assess-

ments • Using analytics to manage risk effectively2 Days


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How to manage Operational Risk 2 days

Course Highlights • Identify and define the boundaries of opera-

tional risk • Understand specific risks in financial

institutions and their impact on operational efficiency

• Examine some of the models • Identify solutions and tackle line manage-

ment, internal control and the effect of human error

• Implement IT solutions to mitigate opera-tional risk

Course outline • Operational risk – what is it and why does it

matter?• Factors influencing the importance of opera-

tional risk • Market consolidation and margin squeeze • The complexity and soph istication of IT

systems • Regulatory and risk capital allocation pres-

sures • Hidden risks posed by complex financial

products • Improved communications and reliance upon

efficient IT systems and STP

Risks identified and defined • Fraud • Systems and operations • Communication • Documentation • Delivery and settlements – matching the

‘book’

Specific risks • Technology • Systems failure • Programming errors • Telecoms • People • Incompetence • Fraud • Process

• Execution error • Booking error • Transaction and mis-matching of trades Discussion: Barings, Sumitomo, Orange County, BT – could one put a capital charge against these human and systems errors? Could they have been prevented through better measurement?

Whose responsibility is operational risk? • Organisational group risk – policy setting • Internal audit — assurance • Operations – execution • Traders • Front, middle, back office • IT

Can operational risk be measured?Understanding the models – the ‘quantitative’ approach • The major models • Back-testing • High impact/ low probability • The P&L • Extreme value theory • Impact probability matrix • Risk capital allocation and the Basle debate • Qualitative Issues • Limitations of models and metrics

in measuring risk

Where next? Doing something about itGeneric approaches • Do nothing • Insurance • Risk profiles mapping • MIS • Straight Through Processing • Processes and controls • Overcoming data incompatibility • Systems reconciliation Soft issues • Building risk awareness culture • Building consensus on risk allocation policies • Building sense of responsibility for risk

reduction • Overcoming resistance to change and estab-

lishing clear, straight-through communication channels

• Corporate governance Identifying and tackling line management issues • Assessing the level of senior management

buy-in to operational risk solutions

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• Understanding reporting lines and roles/ responsibilities

• Implementing effective management control • Empowerment and staff control

Case study: Illustrating and applying the poten-tial risks and options for mitigating, reducing and avoiding catastrophic impact events in a merger environment

Working through the framework – 4 stage processCase Stage 1: Understanding how the new operational risk environment might look • Covering the period after the offer announce-

ment • Using organisational charts and skills matrix • The importance of understanding the trading

functions coverage • Which offices responsible for which func-

tions? • Systems map and assessment • Take-over rules – ensuring information secu-

rity Case Stage 2: understanding the new operational risk environment • Covering the period after the offer is agreed • Matching of people • Matching of systems • Assessing how the support function will work Case Stage 3: Living with the new operational risk environment • Short-term – surviving the first few months • Making the two firms work • Taking on the trading books • Getting the systems to communicate and

work in tandem • Living with multiple back-office and front-of-

fice systems • Living with multiple processes • Linking switchboards, networks and email • Politics • Dealing with resentment, dismissals/ redun-

dancies • Keeping the systems running Case Stage 4: Designing and building a better operational risk environment • Longer-term – integration and rationalisation • Process re-engineering and streamlining

processes • Removing duplication • STP projects

• Systems design and end-user considerations • Single back office and front office • Overcoming resistance and introducing train-

ing strategies • Project planning, budgeting and communica-

tions • Assigning responsibility for risk policy

Course FeesVAT to be included at the local rate, if appli-cable. Costs shown are per delegate inclusive of refreshments, lunches and seminar materials. Cost of accommodation is not included.GBP 2500


Market Risk 2 days

Course Highlights • VaR models and how to build them • Regulations for risk capital • GARCH, EWMA and historical models for

volatility and correlation • Scenario analysis and stress simulations • Non-normal market models and their impact

on option pricing models and VaR

Introduction to market risk• Understanding the major sources of market risk Identifying main techniques for measuring risk • Market risk regulations and Basel 2

Value-at-Risk models: from basics to latest developments• Application to liquid equities and foreign

exchange • Challenges in Value at Risk in fixed income • Applications to derivatives (Delta-Gamma) • The need for Monte Carlo methods • Why do different VAR models give such

diverse results? • Historical VaR and VCV methods • Introducing alternative measures of risk• Sensitivity based risk measures: PVBP and Beta • Risk factors and sensitivities in options port-

folios: the Greeks • the problem of non-normality • Downside risk, regret and maximum loss

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• Coherent risk measures and conditional VaR Extreme Value Theory

• Copulas and non-linear dependence

Statistical methods for estimating and forecasting volatility and correlation• Uses and abuses of equally weighted moving

averages • Advantages and limitations of exponentially

weighted moving averages (RiskMetrics) • Making GARCH models work for you • conceptual framework: stochastic volatility

and conditional heteroscedasticity • examining common pitfalls with estimating

GARCH models • parameter stability, convergence of methods • Validating volatility forecasts • Statistical vs operational methods • Methods for generating large covariance

matrices: (EWMA and GARCH) • Factor Models



Money and Banking 2 days

Course outline

I. Motivation for Studying Money and Banking1. Reasons for Studying Banking and Financial Institutions

a. Structure of the Financial Systemb. Banks and Other Financial Institutionsc. Financial Innovation

2. Reasons for Studying Money and Monetary Policy

a. The Role of Money in the Economyb. Money and Business Cyclesc. Money and Inflationd. Money and Interest Ratese. Conduct of Monetary Policy

3. Framework for the Study of Money and Banking

a. A Simplified Approach to the Demand for Assetsb. The Concept of Equilibriumc. Basic Supply and Demand to Explain Behaviour in Financial Marketsd. The Search for Profitse. An Approach to Financial Structure Based on Transaction Costs and Asymmetric Infor-mationf. Aggregate Supply and Demand Analysis

II. An Overview of the Financial System1. The Role of Financial Markets

a. Matching Borrowers and Lendersb. Risk Sharingc. Liquidity

2. The Structure of Financial Marketsa. Debt and Equity Marketsb. Primary and Secondary Marketsc. Exchanges and Over-The-Counter Markets

3. The Role of Financial Intermediariesa. Indirect Financeb. Transaction Costsc. Asymmetric Information: Adverse Selection and Moral Hazard

III. The Role of Money1. Meaning of Money2. Functions of Money

a. Medium of Exchangeb. Unit of Accountc. Store of Value

3. Evolution of the Payments Systema. Commodity Moneyb. Fiat Money

4. Monetary Aggregates5. Reliability of Monetary Data

IV. The Banking Firm1. The Bank Balance Sheet2. Basic Operation of a Bank3. General Principles of Bank Management4. Managing Credit Risk5. Managing Interest Rate Risk6. Off-Balance Sheet Activities7. Financial Innovation

V. Economic Analysis of Banking Regulation

VI. The Central Bank1. Function of a Central Bank2. The Bank of England

a. Structure


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3. The Federal Reserve4. The European Central Bank5. Arguments for and against Central Bank Independence

VII. Multiple Deposit Creation and the Money Supply Process1. Money Supply Process Agents

a. Central Bankb. Banksc. Depositorsd. Borrowers

2. Balance Sheeta. Assetsb. Liabilitiesc. Monetary Base

3. Control of the Monetary Basea. Open Market Operationsb. Discount Loans

4. Multiple Deposit Creation and Contraction

VIII. Determinants of the Money Supply1. The Money Multiplier2. Determinants of the Money Multiplier

IX. Tools of Monetary Policy1. Open Market Operations2. Discount Policy3. Reserve Requirements

X. Goals and Targets of Monetary Policy1. General Goals of Monetary Policy

a. High Employmentb. Economic Growthc. Price Stabilityd. Interest Rate Stabilitye. Stability of Financial Markets

2. Use of Targets in Monetary Policy3. Choice of Targets in Monetary Policy4. The Taylor Rule5. Exchange Rate Targetting6. Monetary Targetting7. In.ation Targetting

XI. Macroeconomic Transmission Mechanisms of Monetary Policy



Risk Management in commercial banks – Overview of Basel II2 days The objective of risk management is to identify, assess and manage the spectrum of risks to which the Bank is exposed to control the im-pact of adverse occurrences within acceptable risk parameters. In so doing, risk management protects the balance sheet and the Bank’s favourable domestic and international credit rating, which is a vital consideration in access-ing low-cost funding. Risk management also supports the Bank’s corporate strategic goals and key management focus areas, which are: • accountability and diligence • management of change • client relations and partnerships • communication and awareness • funding and financing • business renewal • research and development. The Bank’s risk management capacity was strengthened during the year under review. The development of risk management has improved the organisation’s confidence to develop new business initiatives, with capacity for timely risk assessment and mitigation of proposed products and instruments before implementa-tion.

Risk management structure Risk is managed and monitored within a risk management framework by the committees of the Board, executive and operational manage-ment, the independent risk and compliance functions, and the risk management functions of the operational units. Guided by policies approved by the Board, and supported and monitored by a dedicated centralised risk management unit that focuses on credit risk, the risk management functions are integrated within the business and operational activities where the specialised skills of the business process are vested.

Key areas in risk management Credit risk can be defined as the possibility of a loss due to the inability of counterparties or

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commercialbankingborrowers to meet their repayment obliga-tions. Credit exposure is measured in terms of both current and potential exposure. It is generally represented by the principal value of on-balance-sheet financial instruments, such as the development loans, investments and other assets, and off-balance-sheet direct credit substitutes such as guarantees. Credit risk exposure is measured by internal client credit rating, adjusted by the risk weighting of security held in support of loan debt.

Credit risk Credit risk is actively managed at the

individual project transaction and counterparty levels, using a variety of qualitative and quantitative measures. It is managed from

initial credit approval through to repayment of the credit. Initially, a

full borrower appraisal and credit rating is conducted, complemented by project appraisal and, where applicable, country risk assessment. Monitoring during imple-mentation and surveillance during the loan repayment period is maintained through client contact, credit rating review and loan loss provisioning. Management of this risk is reflected in the quality of the loan book.

Market risk Market risk can be defined as the possibility of a loss due to changes in market prices and rates, and the correlations among them. The market risk to which the banks are exposed includes: • Interest rate risk: This is the spread

between the cost of borrowing and the return on the loan portfolio. The Bank’s lending rate is based on a cost pass-through formula, which traditionally helps limit the interest rate sensitivity of the spread earnings on the Bank’s loan port-folio. In addition, the Bank’s borrowings have been funded largely with medium- to long-term borrowings, which provide a reasonably stable interest rate basis. The Bank also uses interest rate swaps to closely align the rate sensitivity character-istics of the loan portfolio with that of the underlying funding. Interest rate risk also

arises from the different repricing of as-sets, liabilities and contractual maturities. As part of the asset and liability manage-ment process, the Bank is implement-ing the asset and liability management (ALMAN) system to manage the mismatch between assets and liabilities. The interest rate risk of the Bank’s liquidity policy is limited to particular markets, instruments and duration.

• Exchange rate risk: The Bank matches its borrowing obligation in any currency with assets in the same currency. In addition, it only enters in forward exchange contracts and cross-currency swap agreements with reputable counterparties rated A2 or bet-ter by international credit rating agencies.

Liquidity risk Liquidity risk is the ability of the bank to meet its financial obligations as they fall due, and manage the mismatch in the maturing of assets and liabilities. The Bank uses a wide maturity spectrum to fund its borrowings. Liquidity holdings are held mainly in government securities, call and term deposits.

Operational risk Insurable asset and liability risks are in-sured and annually reviewed. Systems and procedures are continuously reviewed and appraised. Procurement policy has been overhauled and anti-fraud and corruption measures adopted, supported by a hotline facility to encourage staff to expose any abuse.

Course outline• Role of risk management in commercial

banks • Risk management structure in banks • Different types of risks which banks are

exposed with• How to define and different types of risks• How to measure different type of risks • Monitoring risk in commercial banks • Role of efficient reporting • Banks’ Hedging policy• Relevant policy statements • Basel II Norms • Risk Categorization

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• Impact on the overall lending process • Seminar outlining the Basel II data

infrastructure and regulatory reporting requirements facing financial institutions.

• view on the road to reporting compliance • Basel II impact on enterprise technology. • Provide valuable insight for peer institu-

tions dealing with regulatory capital calculations and reporting.

• The impact of Basel II on private equity in-vestments, or on lower grade/longer term credit exposures, by banking organiza-tions.

• Other Legal and Compliance Issues Relat-ing to Operational and Reputational Risk: Capital Markets Perspective

• Impact on Borrowing • Different approaches in credit risk • Different approaches in operational risk• Different methods of market risk • Conclusions on the Basel II recommenda-

tions



Bank Financial Risk Management Five Days

What the course ProvidesBank Financial Risk Management is a com-prehensive banking seminar offered and is a must for financial services professionals today. To fully understand the business of banking, managers should have a working knowledge of the fundamental variables and relationships that affect the financial management process within a bank. This seminar gives managers an opportunity to focus on the financial decisions faced by members of a bank’s asset and liability com-mittee. Seminar participants will learn how

to manage the many trade-offs inherent in a bank’s financial management, as well as the different strategies used to address them.

Who Should Attend Financial services professionals, who must rely on their capacity to analyse, explain and act upon key bank financial management practices, policies and strategies.

What Participants Learn The professional attending this seminar will gain:• Insight into the key success factors affect-

ing the profitability of banks in today’s financial services industry, resulting in a deeper understanding of the risk-return trade-offs that bank managers face;

• Knowledge of the factors that affect the decision-making process in bank asset and liability management;

• A future perspective on financial services, given the changing competitive and regu-latory environment;

• The capacity to explain financial institu-tions performance along pertinent finan-cial dimensions and to use these bench-marks to evaluate the relative success of financial policies and strategies over time.

How Can It Be Delivered This course can be offered on your premises in a classroom setting. Some customisation of the course is available upon request to meet your specific learning objectives.

Certificates of Participation Certificates of participation are remitted to seminar participants upon request.

Seminar outline:

Framework of Critical Management Variables • Assets and Liabilities, Off-Balance Sheet

Operations and Financial Accounts • Impact of Financial Decisions on Bank

Performance • How to Define, Measure, Monitor and Man-

age Selected Financial Risks

Liquidity Management • Bank Liquidity Management Tools • Policies, Strategies and Performance

Ratios

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Off-Balance Sheet • Off-Balance Sheet Instruments • Other Income Generating Capacity of Banks Off-Balance Sheet Activities

Interest Rate Risk Management • Sources and Impact of Interest Rate Risk • Maturity Gap, Present Value of Financial

Assets and Liabilities, Duration Gap • Off-Balance Sheet Operations and Their

Impact on Interest Rate and Market Risks Credit Risk Management • Credit Risk for Various Asset Categories • Measurement of Credit Risk• Credit Risk Management Goals

Bank Profitability Management• Banks’ Profit Management Tools • Profit Management Goals • Market-based Measures of Bank Financial

Fragility, the Value-added Approach • Value Added to Shareholders • EPS & SP movements • Factors influencing market value of shares

Capital Account Management • Influence on Profitability and Risk • Value at Risk and its Models • The Impact of Financial Leverage on

Balance Sheet and Off-Balance Sheet Activities

• Operational and Regulatory Constraints

Productivity Management • Components of Total Expenses • Measuring Bank Productivity • Economies of Scale, Economies of Scope

and Economies of Experience in Banking



Credit Risk Management ParticipantsBank managers and lending officers, lending and financing analysts. The course is de-signed also for managers making decisions regarding the future direction of a bank based on risk and ratios assessment.

ObjectivesThe overall objectives of the course are to enhance participants‘ knowledge and improve their skills of corporate lending; to sharpen business risk assessment, and to provide additional tools to evaluate credit risk.

Content• risk evaluation, • strategic analysis, – economic, political, industry, and com-

pany specific risk, – Porter and SWOT analysis, • the principles of lending, lending frame-

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work, • analyzing financial performance, • cash flow analysis, • cash flows and project evaluation, – risk evaluation in project finance, risk

cover assessment as viewed both by credi-tor and by debtor,

– credit considerations in project develop-ment phases, project evaluation,

– corporate finance, • loan structuring, • bankruptcy and reorganization, – causes of company failure, bankruptcy

prediction, credit scoring techniques, • problem loans, • real-life banking practice based case stud-

ies and exercises.

Duration 3 days



Essentials of BankingIf money does indeed make the world go round, then banks are the institutions that determine how fast it spins! Though most of us have regular interactions with these financial intermediaries from simple cash withdrawals at an ATM to more formal mortgage applications, few fully appreciate how banks are run or their impact on our economy. This course is meant to correct both deficiencies. It is meant for profession-als new to the industry whether analysts, bankers, regulators or laymen who want to be more sophisticated consumers of finan-cial products and services.

Day One will focus on some macro issues such as the money supply, interest rates, and the role of the Bank of England or Federal Reserve.

The classic debate between Keynesians and Monetarists will be revisited as banks are viewed as conduits of economic policy.

Day Two will focus on banks as regulated businesses and will distinguish between the traditional functions of commercial and investment banks. The perspective here is less that of the economist and more that of a director who asks, ‘How is this organization maximiz-ing shareholder value?’

Course Outline Day One

Brief Overview of the Capital Markets • The Traditional Role of Banks Money – What is it ? How does it work ? • Function and Properties • Definitions and Measures • Creation and Velocity

The Federal Reserve – Power, Presence, Policy • How the Fed controls the money supply • Reserve requirement • Discount rate • OMC • Regulatory importance

Macro Economic Issues • Monetary vs. Fiscal Policy • The Keynesians and the Monetarists • Mr. Keynes and Mr. Friedman • Political Issues : Growth and Inflation • Chairman Greenspan on Risk and Uncer-

tainty • Banks as Financial Intermediaries • Loans and Deposits • Size and Diversity • Retail vs. Money Center

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Day Two

The Yield Curve – Why is it important ? • Its Shape • Theories

Interest Rates • Asset – Liability Management • Cost of Funds • Pricing a loan

How a Large Commercial Money Center Bank Makes Money: Let’s Go to the Bal-ance Sheet • Loans • Branches • Securities Processing • Trust and Estates

The Treasury Function – Managing the Gap & Minimizing the Cost of Capital (Bor-rowing Cheap and Lending Dear) • Money Market Instruments • Fed Funds • Repos • CDs • Commercial Paper • Bankers Acceptances

Capital Adequacy • Reserve requirements • Off balance sheet risk • Managing Risk: How Are Loans Like

Bonds? • Credit Risk • Interest Rate Risk

How Investment Banks Make Money – Back to the Balance Sheet • Traditional Separation between Invest-

ment and Commercial Banks • Mergers and Acquisitions • Initial Public Offerings (IPO’s) • Financial Advisory • Asset Management



Global Banking and Capital Markets2 days

Course Description:“Global Banking” encompasses the integra-tion of investment and wholesale banking services since the repeal in 1999 of the Glass-Steagall Act. (that separated commer-cial and investment banking activities in the US and was passed in 1933). Such banking services have today become global as a result of deregulation, market integration, and dramatic political actions (such as the ending of the Soviet Union and the forma-tion of the European Union). Further, most wholesale financial transactions in the world today are completed in capital markets, and the exceptional growth of these markets over the past twenty years has made many new types of financial transactions possible.The focus of this course is primarily on determinants of competitive performance in the wholesale financial services industry. The course covers a variety of diverse com-mercial and investment banking products and activities, and regulatory practices, and addresses the dynamics of competition and success in global banking as it is practiced today.The discussion of various global banking products and activities is linked to a simulta-neous discussion of differences in competi-tive practices and conditions between the principal markets in the US, Europe, Japan, and emerging markets.Throughout the course, relevant current events are examined and used to illustrate teaching points.The course is highly case oriented and involves extensive discussion of twelve cases that have been specially prepared for this course only.Concluding the course is an exploration of the determinants of competitive success in global banking. We examine what market share, profitability, growth and similar dimensions of performance by individual financial institutions mean in the global marketplace.

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courses

commercialbankingPedagogy:The case discussions are interspersed with lectures to explain the technical aspects of the activities covered by the cases. The course does not involve routine lectures on material presented in the readings, and therefore the class sessions and the read-ings complement each other.

Course OutlineIntroduction and overview: Major develop-ments shaping global banking and finance

CASE: CitigroupInternational Money and Foreign Exchange MarketsProject Financing and Syndicated Lending

CASE: Chase’s Strategy for Syndicating the Hong KongDisneyland LoanGlobal Debt and Swap MarketsGlobal Equity Markets

CASE: Deutsche Telekom Privatisation

Global M&A Transactions

CASE: The Acquisition of case study

CASE: Olivetti – Telecom ItaliaInstitutional Asset ManagementASSIGNMENT: GB, Chapter 10

CASE: Alliance Capital Management*Private Banking

Case: UBS Private Banking*Evolution in Japan’s Financial Markets

CASE: Shinsei Bank Ltd.Global Banking in Emerging Markets

CASE: ICICIStrategic Challenges and Performance

CASE: JP Morgan Chase & Co*

Course FeesVAT to be included at the local rate, if applicable. Costs shown are per delegate inclusive of refreshments, lunches and seminar materials. Cost of accommodation is not included.GBP 2500


Management of risk – basic Management of Risk is a two-day class-room-based course on identifying and managing risk. It raises awareness of risk management and explores the process, main tools and techniques available for the successful assessment and treatment of risk. At the conclusion of the course you should:Have the beginning of your risk manage-ment plan including:• Risk action plans • Be able to identify major risks • Have a treatment plan for major risks • Know the importance of risk manage-

ment for your company or your organi-sation

Course outline: • Explain the requirement of risk manage-

ment • Establishing the risk management policy • The risk management process • The importance of monitoring and

review • Commence a risk management plan ap-

propriate to individual requirements



Modern Banking � Days

Course AimThe aim of this course is to provide a good grasp of both the basics (the structure and environment of banking) and selected aspects of the applied economics of the modern banking firm. The topics covered

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include financial and credit intermedia-tion, structure-conduct-performance, bank efficiency, risks of banking, regulation, technology and innovation.

Learning OutcomesBy the end of this course participants should be able to:• Evaluate the impact of the main environ-

mental forces of change on the strategies and performance of modern global banks.

• Evaluate critically the empirical evidence related to the industrial structure of banking and efficiency.

• Appraise the role of banks as risk moni-tors and managers.

• Understand why banks need regulation and distinguish between the different types of regulation.

Course Outline

1: Financial and credit intermediation: basic conceptsTransactions costs; agency problems; asymmetric information and role of banks; genesis of the financial system; functions of financial intermediaries.

2: ‘Specialness’ of financial intermediaries and role of central bankSpecialness of financial intermediaries in a changing environment; central banking; theory of banking clubs.

3: Market structure and bank performanceSCP and relative market power hypoth-eses;

4. Microeconomics of banks: production process and efficiencyBank inputs and outputs; scale and scope economies; X-efficiencies.

5: Main risks of bankingBanks strategic business plan; types of risks in banking; frameworks for risk man-agement; focus on interest rate risk and liquidity risk.

6: Credit riskBanks’ lending function; agency problems; credit analysis; pricing of loans;adverse selection; techniques to measure and manage credit risk.

7: Bank regulationRationale for financial regulation; types of regulation; bank deregulation.

8: Capital adequacyFunctions of capital; objectives of ‘re-regu-lation’; Basel I and II.

9: Banking and the EMUSingle market for financial services; EMU and the euro; the FSAP.ECB (1999a), European Commission (1999), Gardener et al. (2001)

10: Technology, financial innovation and globalisation trendsCauses of innovation and technological advances; changes in the paymentsystems and banks’ delivery channels; internet banking.



Overview of Banking 2 days

ObjectivesThis course focuses on the roles and functions of money and banking in the economy. It provides participants with the knowledge to better understand the working and the regulation of the bank-ing industry as well as the conduct of monetary policy. We will learn how money is multiplied and supplied through the banking system. Examples from UK Hong Kong, China, and the U.S. will be used to illustrate the concepts introduced.

Course outline I. Introduction

1. Definition of money2. An overview of the financial system


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3. Significance of money and bankingII. Financial markets, institutions and interest rates

1. Financial markets and instruments2. Financial intermediation3. The behavior of interest rates�. Real interest rates�. Term structure and risk structure of interest rates

III. Banking: structure, regulation and deposit insurance

1. Commercial banking2. The banking industry: structure and regulation3. Banking regulation in Hong Kong�. Banking crises and deposit insurance

IV. Central banks and the money supply process

1. Money supply process in the U.S.a. the Federal Reserve Systemb. monetary basec. monetary multiplier

2. Money supply process in Hong Kong3. Money supply process in China

V. Monetary policy1. Rules versus discretion2. The tools of monetary policy3. The conduct of monetary policy: goals and targets

VI. The demand for money1. Transactions demand2. Precautionary demand3 Speculative demand�. Quantity theory of money


Certificates of Participation Certificates of participation are remitted to course par-ticipants upon request.

Value at Risk 2 days Value at risk is vital for banks, securities firms, commodity and energy merchants, and other trading organisations to be able to track their portfolios’ market risk. It is a measure used by financial practitioners to quantify risk of a portfolio.

Course Description:This course examines modern techniques for managing financial risks. Financial risks are generally classified into market risks, due to movement in financial prices or volatilities, credit risks, due to fact that counterparties are unwilling or unable to fulfill their contractual obligations, liquidity risks, when transactions cannot be conducted at prevailing market prices, perhaps due to cash flow constraints, and operational risks, which arise from human or technical problems. The course will cover measurement tech-niques for different types of contracts and portfolios (equity, fixed income, currency) such as duration, portfolio beta, factor sensitivities, value at risk, dynamic port-folio distribution analysis, and extreme value analysis. It will also discuss how risk measurement tools can be used for active management of the risk/return profile of financial institutions.

Course Objective:To provide participants with an in-depth knowledge of the most recent risk identi-fication, measurement and management techniques. This topic is essential for professionals involved in risk management, derivatives research, trading, treasury man-agement, financial corporate strategy, as well as supervision of financial institutions.



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Banking Courses by GRMG

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