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    Becoming a Financial Risk ManagerUsing the FRM to Build andAdvance Your Career

    William MaySenior Vice PresidentFRM Program Manager

    Global Association of Risk ProfessionalsSeptember 2011

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    Emergence of the Risk Management Profession

    Risk management profession only loosely existed 20 years ago Drivers of risk management as a profession

    Notable risk management failures Orange County, LTCM, Barings, Socit Gnrale, Credit crisis

    Financial innovation Growth in use and availability of derivatives 80s and beyond

    Risk measurement techniques Late 80s early 90s JP Morgan developed Value-at-Risk to quantify expected loss

    Computational power Ability to gather position data and measure risk in a timely manner

    Best practice recommendations Group of 30 report

    Regulatory Initiatives International Basel I, II, III

    National Sox, Dodd-Frank, FSA, etc.

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    Why would one consider becoming an FRM?

    The risk management profession has seen considerable growth over the past 15years, fueled by the complexity of financial products, increased regulation, and

    recent notable institutional failures. Like other career paths in finance, having an advanced degree and certification in

    financial risk management helps to increase your career potential.

    FRM holders have achieved positions such as Chief Risk Officer, Senior Risk Analyst, Head of Operational Risk, and Director, Investment Risk Management,to name a few.

    Earning an FRM designation not only broadens your skill set, it demonstrates a

    standardized level of industry knowledge, making you a recognized leader infinancial risk management.

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    Financial Risk Management Skills are in High Demand

    Demand for financial risk managers is strong

    Source: Indeed.com And is expected to remain strong

    Risk Management ranked #14 in the CNN Money and PayScale.coms 2010 list of top100 careers with great pay and growth prospects, expecting 10-year job growth of 24%.Source CNN Money

    http://www.indeed.com/jobtrends?q=financial+risk+management&relative=1http://money.cnn.com/magazines/moneymag/bestjobs/2010/full_list/index.htmlhttp://money.cnn.com/magazines/moneymag/bestjobs/2010/full_list/index.htmlhttp://www.indeed.com/jobtrends?q=financial+risk+management&relative=1
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    GARP and the FRM

    As the leading professional association for risk managers, GARP's mission is to advance the risk profession through education, training

    and the promotion of best practices globally.

    Not-for-profit association, founded in 1996 Over 150,000 members from 195 countries and territories Governed by Board of Trustees comprised of leading risk executives and

    researchers Offices in Jersey City, NJ and London

    Financial Risk Manager (FRM) Leading global professional designation program for risk management Administered by GARP since 1997 Program objective assess an individuals ability to measure and manage risk

    in a real-world environment FRM Committee comprised of senior risk managers and researchers oversee

    program

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    2011 FRM Committee

    Dr. Ren Stulz (Chairman) Everett D. Reese Chair of Banking and Monetary Economics, Ohio State University

    Rich Apostolik President and Chief Executive Officer, GARP

    Richard Brandt Risk Oversight, Citibank

    Juan Carlos Garcia Cespedes Head of Risk Methodologies, BBVADr. Chris Donohue Managing Director, Head of GARP Research Center

    Herv Geny Global Head of Risk, ICAP

    Dr. Satyajit Karnik, FRM Fordham University

    Kai Leifert, FRM Regional CRO, Northern Trust Global Investments

    Steve Lerit Senior Vice President, Bank of AmericaWilliam May Senior Vice President, GARP Research Center

    Michelle McCarthy Managing Director, Director of Risk Management, Nuveen Investments

    Michael B. Miller, FRM Head of Risk Management, Tremblant Capital Group

    Ezra Uzi Moualem, FRM Vice President, The Financial Institute of Israel & Managing Director, ZRisk

    Dr. Victor Ng Vice President, Head of Risk Modeling - Firmwide Risk, Goldman SachsDr. Elliot Noma Managing Director, Garrett Asset Management

    Liu Ruixia Deputy General Manager, Risk Management, Industrial and Commercial Bank of China

    Robert Scanlon Group Chief Credit Officer, Standard Chartered Bank

    Dr. Til Schuermann Partner, Oliver Wyman

    Serge Sverdlov Senior Quantitative Manager, Microsoft CorporationAlan Weindorf Treasury, Visa

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    The FRM Program

    Two-part program Part I curriculum covers the tools used to assess risk

    Foundations of Risk Management (20%) Quantitative Analysis (20%) Financial Markets and Products (30%) Valuation and Risk Models (30%)

    Part II curriculum focuses on the practical application of those tools Market Risk Measurement and Management (25%) Credit Risk Measurement and Management (25%) Operational and Integrated Risk Management (25%) Risk Management in Investment Management (15%)

    Current Issues in Financial Markets (10%)

    Part II Exam(4 hours, 80 MCQ)

    Part I Exam(4 hours, 100 MCQ)

    Demonstrate two

    years relevantwork experience

    Certified

    Financial RiskManager (FRM )

    VoluntaryContinuingEducation40 hours/2 years

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    FRM Registrations

    Growth of the FRM Program

    Average growth of 34% in registered candidates per year since 2000

    2010 registrations represent over 4,447 firms globally

    Exams offered in 92 locations around the world in 2010 Registrants come from every major financial institution, consulting

    firm, regulatory body, and academic institution

    100,000 th FRM candidate registered for the November 2010 exam

    Currently, there are over 20,000 Certified FRMs

    Full Exam 37.0% 42.9% 54.0% 53.3% 62.7% 58.9% 53.8% 52.5% 44.0% 44.8% 44.4% 42.4% 44.1%

    Part I

    55.2% 52.5% 39.3%

    Part II 54.0% 54.9%

    Pass Rate

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    Acceptance of the FRM Program

    Represent every major banking institution,government regulator, consulting firm and financialservices institution around the world

    Average annual growth of 30%

    646 organizations have five or more FRM Candidates Top 20 companies with the most FRM Holders

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    Global Participation in the FRM Program

    Significant growth throughout the world since 2007

    0%

    50%

    100%

    150%

    200%

    250%

    300%

    350%FRM Registration Growth Since 2007

    2010

    2011 (Projected)

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    Diversity of FRM Candidates

    Distribution of FRM Candidates May 2011

    Banking

    Financial Services (non-bank)

    AcademicRisk & Technology Vendors

    Consulting

    Insurance

    Other

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    Strengthening the FRM Program

    FRM Part I Books with Pearson Available this month (May 2011)

    Global Job Task Analysis A formal study of the current knowledge, skill and

    abilities required to perform the job of financialrisk manager globally

    To validate the appropriateness of the current FRMexamination and to guide the design of future FRMprogram

    University Partnerships

    Working with universities globally to develop andenhance risk curricula and to directly embed theFRM examination into academic programs

    Continuing Professional Education

    Launched in late 2010

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    The FRM Exam Process

    Outlines topics andreadings for Part 1 andPart 2 Exams

    Developed annually byFRM Committee

    Insight from CertifiedFRMs and risk community

    Download2011 FRM

    Study Guide

    Register on GARPwebsite:www.garp.org/frm

    Leverage candidateresources, includingpractice exams, books,course packs, FRMtraining providers(more later)

    RegisterAnd

    Prepare

    Developed with inputfrom FRM Committee,certified FRMs andother risk professionals

    4 Hour exam, 100Multiple ChoiceQuestions

    November 19, 2011,Morning Session

    Sit for Part 1Exam

    Developed with inputfrom FRM Committee,certified FRMs andother risk professionals

    4 Hour exam, 80Multiple ChoiceQuestions

    November 19, 2011,Afternoon Session

    Sit for Part 2Exam

    http://www.garp.org/frmhttp://www.garp.org/frm
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    FRM Registration Timeline and Fees

    Program Enrollment and Exam Registration Fee

    Part I Part IIProgram Enrollment Fee (valid for 4 years) USD 300

    June 1, 2011 July 31, 2011 USD 350 USD 350

    August 1, 2011 August 31, 2011 USD 475 USD 475

    September 1, 2011 October 15, 2011 USD 650 USD 650

    Enrollment fee includes 1-year complimentary GARP membership Candidates can elect to take both Part I and Part II in November

    However, candidate must pass Part I to have Part II exam scored Deferral policy Questions? Contact [email protected]

    mailto:[email protected]:[email protected]
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    November 2011 FRM Exam Sites

    Africa Jordan, Amman USA, California, San Francisco Germany, MunichKenya, Nairobi Korea, Seoul USA, Colorado, Denver Iceland, Reykjavik Nigeria, Lagos Kuwait, Safat USA, D.C., Washington Ireland, DublinSouth Africa, Cape Town Lebanon, Beirut USA, Florida, Tampa Italy, Milan

    South Africa, Johannesburg Malaysia, Kuala Lumpur USA, Georgia, Atlanta LuxembourgSouth Africa, Vanderbijlpark Oman, Muscat USA, Illinois, Chicago Poland, Warsaw

    Pakistan, Karachi USA, Louisiana, New Orleans Russian Federation, MoscowAsia Philippines, Manila USA, Massachusetts, Waltham Spain, BarcelonaChina, Beijing Saudi Arabia, Riyadh USA, Michigan, Ann Arbor Spain, MadridChina, Chengdu Singapore USA, New York, New York Sweden, StockholmChina, Guangzhou Taiwan, Taipei USA, NJ, New Brunswick Switzerland, GenevaChina, Hong Kong Thailand, Bangkok USA, North Carolina, Charlotte Switzerland, ZurichChina, Nanjing United Arab Emirates, Dubai USA, Ohio, Columbus The Netherlands, AmsterdamChina, Shanghai USA, Pennsylvania, Philadelphia The Netherlands, UtrechtChina, Wuhan Americas USA, Texas, Dallas Turkey, IstanbulIndia, Bangalore Bermuda, Paget USA, Texas, Houston Ukraine, KievIndia, Calicut, Kerala Brazil, Sao Paulo USA, Washington, Seattle UK, England, London

    India, Chennai Canada, BC, Surrey UK, Scotland, EdinburghIndia, Hyderabad Canada, Ontario, Toronto EuropeIndia, Kolkata Canada, Quebec, Montreal Austria, Vienna OceaniaIndia, Mumbai Honduras, Tegucigalpa Belgium, Brussels Australia, MelbourneIndia, New Delhi West Indies, Jamaica Bulgaria, Sofia Australia, SydneyIndonesia, Jakarta Mexico, Mexico City Czech Republic, Prague New Zealand, AucklandIsrael, Tel Aviv (Sunday) Peru, Lima France, ParisJapan, Tokyo USA, California, Los Angeles Germany, Frankfurt

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    FRM Candidate Resources

    2011 FRM Study Guide (Free) 2011 FRM AIMS (Free) 2011 FRM Practice Exams (Free) 2011 FRM Part 1 Books ($250 + shipping) 2011 FRM Part 2 Course Pack

    ($370 + shipping) FRM Handbook ($122.50 + shipping) FRM Training Course Providers Local Study Groups

    GARP Website GARP Chapters

    Social Media: LinkedIn, Facebook

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    Academic Outreach

    35 chapters in 17 countries (from Cornell to Kenya and back again)

    University Chapters give students a forum through which they can learn,

    communicate their ideas, and network with their peers and practitioners Participation in University Chapter meetings gives students the chance to:

    Better understand professional life and what to expect in the workplace

    Be better equipped for the career opportunities that lie ahead for them in the risk

    management community University Chapters give the practitioner community a forum to interact with and

    inform the academic community about relevant trends and issues in riskmanagement

    Partnership for Risk Education

    University Chapter Network

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    Q & A

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    Creating a culture ofrisk awareness TM

    Global Association ofRisk Professionals

    111 Town Square PlaceSuite 1215Jersey City, New Jersey 07310USA+ 1 201.719.7210

    Minster House, 1st Floor42 Mincing LaneLondon EC3R 7AEUK+ 44 (0) 20 7397 9631

    www.garp.org

    2011 Global Association of Risk Professionals. All rights reserved.

    About GARP | The Global Association of Risk Professionals (GARP) is a not-for-profit global membership organization dedicated to preparing professionals and organizations to make better informed risk decisions. Membership represents over 150,000 risk management practitioners and researchers from banks, investment management firms, government agencies,academic institutions, and corporations from more than 195 countries. GARP administers the Financial Risk Manager (FRM ) and the Energy Risk Professional (ERP ) exams; certifications recognized by risk professionals worldwide. GARP also helps advance the role of risk management via comprehensive professional education and training for professionals of all levels. www.garp.org.


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