New challenges in financial risk management
This training focuses on:
- Changes in economic models resulting from regulatory reforms and digitisation;
- Enterprise Risk Management (ERM): new types of financial, non-financial and emerging risks;
- Risk appetite: link to strategy and transposition into day-to-day management decisions;
- Balance sheet optimisation and financial planning: dynamic between finance, business and ERM.
This training course can be undertaken by different groups:
- Risk managers at a company, entity or at corporate level;
- Business, risk and finance managers involved in risk appetite, financial planning and financial resource management (capital/liquidity/leverage).
Advanced level: offers practice-based applications to complement the theoretical knowledge already acquired through the "basic level" courses (in-depth learning).
Other conditions: good understanding of results and balance sheet structure as well as underlying principles of banking regulation.
Fundamentals of risk and value creation:
- Shareholder perspective: return on equity, share price value and growth, shareholder risk and sources of revenue volatility
- Creditor perspective: capital and liquidity reserves, credit rating, risk for creditor and sources of capital volatility
- Relationship between volatility (risk), capital and economic value creation
- Main sources of value creation in traditional banking business models
Structural changes in business models:
More market-based financing of the European economy:
- The unintended consequences of regulatory reforms
- Political incentives for more diversified financing: regulatory benefits for insurers and funds, securitisation standards, European Union of capital markets
- The impact of reduced bank lending on client behaviour risk and liquidity risk
The technological revolution in the customer interface and internal processes:
- The strategic role of data and analytics in digital banking services;
- The role of technological innovation in finance, insurance, regulation, etc.;
- The growing importance of non-financial risks (cyber-attacks, model, data, franchise, etc.)
The potential landscape of the future financial ecosystem:
- A combination of regulated and non-regulated entities;
- A separation of risk and value creation based on the client interface and balance sheet management;
- Transaction simplification and the importance of the institutions managing transactions (custody, clearing, payment, data repository, etc.);
- New sources of value creation and new risks emerging from this ecosystem.
Enterprise Risk Management:
Overview of financial and non-financial risks
Management of concentration risks
- Event risk: sources and impact of interconnections
- Systemic risk: sources and impact of correlations
New emerging risks arising from changes in business models and in the corporate context:
- Cyber risk, model risk, outsourcing risk
- Geopolitical and social risks, climate risk
Scenario-based business risk management:
- Value and limitations of sensitivity analyses
- Purpose and limitations of regulatory stress tests
- Increasing importance of estimating indirect effects of plausible scenarios
- Projected time horizon for integration of new emerging risks into plausible scenarios
- Performance objectives and risk tolerance: the risk appetite corridor;
- From strategy to risk appetite statements;
- From risk appetite statements to risk appetite indicators;
- Cascading down to business units, legal entities and risk types;
- Model- and scenario-based assessment of compliance with the risk appetite corridor.
Balance sheet optimisation:
- The three financial resources: capital, liquidity, leverage;
- Approaches to estimating risk and performance: accounting, economic, regulatory and market methods;
- Optimisation of performance in accordance with regulatory, accounting, risk and corporate constraints;
- The role of ERM in financial planning, capital allocation and risk appetite management;
- The role of credit portfolio and cash flow management in balance sheet optimisation and capital market instruments used to mitigate risks or optimise balance sheets.
Duration: 1 day training
Hours: 9AM-5PM (6 hours of training)
Location: Febelfin Academy, Rue d’Arlon/Aarlenstraat 80, 1040 Brussels
Additional information: This training course will be given in English
Type of training: Classroom
During the training, we offer a combination of practice and theory. The case studies, examples and exercises are drawn from day-to-day practice or applied by you and then resolved under the supervision of the trainer.
Training materials: PowerPoint presentation
Bank: The course covers the technical knowledge regarding the financial products in banking and investment services in accordance with Article 7, §1, 1°, b and c of the Royal Decree of 1 July 2006.
Risk, finance & treasury