Operational Risk Management

This one-day program uncovers the essential framework and components of managing operational risk in the financial industry.The Basel Committee defines Operational Risk as “the risk of loss resulting from inadequate or failed internal processes, people, and systems, or from external events”. Participants will examine Operational Risk Management (ORM) as the process of identifying, monitoring and controlling operational risk. This course focuses on how both buy side and sell side firms, along with their service providers such as custodians, prime brokers and fund administrators employ industry best practices to manage operational risk.

Using recent case studies, participants will explore practical tools that are critical elements of an operational risk assessment program and explore how these tools are applied to financial firms.Risk assessment techniques will be examined and include how to capture, report and investigate operational risk events.Firm-wide consolidated risk reporting that summarizes exposure, incident escalation and Key Risk Indicators (KRI’s) will be analyzed.The program content includes other operational risk metrics that are used to ensure transparency and enable strategic decision making.Best practices for the implementation of gatekeeping functions and controls will be discussed using real-life examples and case studies.

Course Objectives

By the end of the course, participants will be able to:

• Recognize specific operational risk issues in financial institutions
• Describe the Basel II Risk-based regulatory framework for Operational Risk
• Identify key risk metrics and benchmarks
• Employ operational risk assessment techniques
• Evaluate and design effective internal controls
• Discuss some of the potential implications of Dodd-Frank
• Review/ explain how risk and quality can be measured

Suggested Prerequisites: None

Program Level: Foundational

Advance Preparation: None

Computers and Financial Calculators: N/A

Recommended CPE Credits: 7