Banking Supervision - Risk-Focused Examination Prep Training Course

Banking Supervision - Risk-Focused Examination Prep Training Course

Introduction

The contemporary financial landscape demands a proactive and adaptive approach to banking oversight, shifting from traditional compliance checks to Risk-Focused Examination (RFE). This pivotal change is driven by the increasing complexity of global financial risks, including cybersecurity threats, climate risk, and the rapid integration of FinTech innovations. Supervisors must master the ability to quickly and accurately identify an institution's inherent risk profile and evaluate the efficacy of its Enterprise Risk Management (ERM) and Corporate Governance frameworks. This preparation course is essential for financial professionals aiming to develop the advanced analytical and critical-thinking skills required to lead or support successful, evidence-based, and forward-looking supervisory engagements.

Banking Supervision - Risk-Focused Examination Prep Training Course is meticulously designed to bridge the gap between regulatory theory and practical application in a high-stakes environment. Participants will not only gain a deep understanding of the Basel Accords (Basel III/IV) and local regulatory standards but will also be immersed in realistic case studies and simulation-based learning to solidify their preparation for the rigors of an RFE. The emphasis is on building proficiency in assessing the materiality of various risk categories (Credit, Market, Liquidity, Operational, and emerging risks) and developing robust supervisory action plans. Successfully completing this course is a critical step in advancing one's career in prudential supervision and ensuring the financial stability of the banking sector.

Course Duration

5 days

Course Objectives

1. Master the Risk-Focused Supervision (RFS) framework and its application in on-site and off-site examination planning.
2. Evaluate a financial institution's overall Inherent Risk Profile across the five major risk categories
3. Analyze the adequacy and effectiveness of Corporate Governance structures and the Board's oversight of risk management.
4. Assess the maturity of the bankΓÇÖs Enterprise Risk Management (ERM) framework, including Risk Appetite and Risk Culture.
5. Interpret and apply core requirements of Basel III/IV in a supervisory context.
6. Develop robust techniques for Stress Testing and Scenario Analysis to gauge resilience to adverse economic conditions.
7. Identify and assess Emerging Risks, specifically Climate Financial Risk and Cybersecurity vulnerabilities.
8. Scrutinize the quality of Internal Controls and Internal Audit function in mitigating material risks.
9. Conduct an in-depth review of Credit Risk Management processes, from loan origination to Non-Performing Loan (NPL) management.
10. Analyze Liquidity and Funding Risk profiles, including contingency funding plans and reliance on wholesale funding.
11. Formulate well-supported Report of Examination (ROE) findings and effective Supervisory Recommendations.
12. Apply data-driven techniques for Off-Site Monitoring and Early Warning Signal (EWS) detection.
13. Communicate complex findings clearly and persuasively to bank management and the board, driving Corrective Action.

Target Audience

1. Bank Supervisors and Examiners
2. Compliance and Risk Management Officers in Financial Institutions
3. Internal and External Auditors specializing in the Banking Sector
4. Credit Analysts and Portfolio Managers seeking a supervisory perspective
5. Financial Regulators and Policy Makers
6. Senior Management preparing for examinations
7. Legal and Advisory Professionals focused on Banking Regulation
8. Mid-level professionals aspiring to roles in Prudential Supervision

Course Modules

Module 1: The Risk-Focused Supervision (RFS) Framework

• Introduction to the shift from compliance to risk-based supervision.
• Case Study: Analyzing a bank's failure due to non-compliance with the RFS mandate.
• Understanding the core principles.
• Techniques for creating an effective Examination Scope and Plan.
• The Supervisory Cycle and the role of continuous off-site monitoring.

Module 2: Corporate Governance and Risk Culture

• Assessing the Board of Directors' effectiveness in risk oversight and challenge.
• Case Study: Evaluating the governance structure of a bank involved in a major trading loss.
• Reviewing the "Three Lines of Defense" model and its practical implementation.
• Defining and evaluating a healthy Risk Culture and ethical standards.
• Succession Planning and the adequacy of Senior Management's expertise.

Module 3: Credit Risk and Asset Quality

• In-depth review of loan underwriting standards and concentration risk analysis.
• Case Study: Assessing the impact of a sharp downturn in a specific sector on a bank's loan book and ALLL adequacy.
• Evaluating the adequacy of the Allowance for Loan and Lease Losses methodology.
• Supervisory techniques for assessing Non-Performing Loans and troubled debt restructuring.
• Analyzing the effectiveness of Credit Risk Mitigation and collateral management.

Module 4: Market, Liquidity, and Capital Adequacy

• Assessing exposure to Interest Rate Risk in the Banking Book and foreign exchange risk.
• Case Study: A bank experiencing a funding crisis.
• Reviewing compliance with Liquidity Coverage Ratio and Net Stable Funding Ratio
• Deep dive into Risk-Weighted Assets (RWA) calculation methodologies.
• Evaluating the bank's Internal Capital Adequacy Assessment Process (ICAAP).

Module 5: Operational Risk and Resiliency

• Identifying and measuring key Operational Risk Events, including process and system failures.
• Case Study: Assessing a bank's response and control deficiencies following a major SWIFT fraud incident or system outage.
• Evaluating the adequacy of Business Continuity Planning and Disaster Recovery
• Supervision of Outsourcing Risk and Third-Party Risk Management.
• Focus on Operational Resilience and ensuring critical business functions can withstand severe shocks.

Module 6: Emerging Risks: Cyber and Climate

• Supervisory review of the bank's Cybersecurity Framework and IT governance.
• Case Study: Reviewing the supervisory findings for a bank that failed a Red Team cyber-attack simulation.
• Understanding Climate Financial Risk and its impact on the loan portfolio.
• Techniques for assessing the integration of climate risk into ERM and disclosures.
• Analyzing risks associated with FinTech partnerships and Digital Transformation.

Module 7: Examination Tools, Techniques, and Communication

• Mastering the use of Uniform Bank Performance Report and other off-site tools for pre-examination analysis.
• Case Study: Simulating an Exit Meeting with Senior Management to present challenging findings on a high-risk area.
• Techniques for effective interviewing of bank personnel and board members.
• Best practices for documenting Workpapers and maintaining an evidence trail.
• Writing clear, concise, and defensible Report of Examination comments and Supervisory Recommendations.

Module 8: Corrective Action and Enforcement

• Understanding the spectrum of Supervisory Action from informal guidance to formal enforcement actions.
• Case Study: Deconstructing a Cease and Desist Order issued by a regulator and analyzing the steps required for its removal.
• Monitoring the bankΓÇÖs progress on implementing Corrective Action Plans.
• The role of the supervisor in crisis intervention and resolution planning.
• Ethical considerations and professional conduct in banking supervision.

Training Methodology

This course employs a participatory and hands-on approach to ensure practical learning, including:

• Interactive lectures and presentations.
• Group discussions and brainstorming sessions.
• Hands-on exercises using real-world datasets.
• Role-playing and scenario-based simulations.
• Analysis of case studies to bridge theory and practice.
• Peer-to-peer learning and networking.
• Expert-led Q&A sessions.
• Continuous feedback and personalized guidance.

Register as a group from 3 participants for a Discount

Send us an email: info@datastatresearch.org or call +254724527104 

Certification

Upon successful completion of this training, participants will be issued with a globally- recognized certificate.

Tailor-Made Course

 We also offer tailor-made courses based on your needs.

Key Notes

a. The participant must be conversant with English.

b. Upon completion of training the participant will be issued with an Authorized Training Certificate

c. Course duration is flexible and the contents can be modified to fit any number of days.

d. The course fee includes facilitation training materials, 2 coffee breaks, buffet lunch and A Certificate upon successful completion of Training.

e. One-year post-training support Consultation and Coaching provided after the course.

f. Payment should be done at least a week before commence of the training, to DATASTAT CONSULTANCY LTD account, as indicated in the invoice so as to enable us prepare better for you.