Global Learning for Operational Leaders
Professional training course
Basel III, Risk Assessment and Stress Testing
This course is designed as an intermediate level in-depth look at the key provisions of the Basel III regulatory framewo... The outline covers Understanding The Role Of Regulatory Bank Capital, Requirements for Qualifyin...
Introduction
Course overview
Why Attend
This course is designed as an intermediate level in-depth look at the key provisions of the Basel III regulatory framework, the ongoing risk assessment practice within banks, and the vital role of stress testing.
Upon completion, participants will have a comprehensive understanding of internal risk assessment as required under Basel III and especially with reference to the ICAAP process.
There will be an in-depth analysis of why stress testing is vitally important to financial institutions, how to conduct stress testing, and why financial regulators are so preoccupied with stress testing in the post 2008 financial environment.
In particular there will be an analytical examination of the kinds of scenarios that can lead to extraordinary credit losses, operational losses, and liquidity stress and can even threaten the survival of financial institutions.
Course Methodology
This course will cover a wide range of learning methods including explanatory slides, case studies, and detailed examination of Excel models in an interactive workshop style environment.
Course Objectives
By the end of the course, participants will be able to:
- Develop a deep understanding of the key elements within the Basel III regulatory framework
- Understand the key metrics and procedures for assessing credit risk, market risk and operational risk
- Understand the vital importance of stress testing as the cornerstone of risk management
- Apply analytical skills for the identification of concentration of credit risk, concentration of funding risk, and systemic liquidity risk
- Develop and formulate procedures and policies with respect to the best practice implementation of stress modelling and associated risk management protocols
Target Audience
This course is suitable for all those working in the banking industry, as well as wealth managers, auditors, and treasury and product control professionals.
Target Competencies
- Regulation compliance
- Scenario generation
- Stress testing - methodological issues
- Best practice implementation of stress modelling
- Thought leadership
What you will achieve
Learning objectives
- Develop a deep understanding of the key elements within the Basel III regulatory framework
- Understand the key metrics and procedures for assessing credit risk, market risk and operational risk
- Understand the vital importance of stress testing as the cornerstone of risk management
- Apply analytical skills for the identification of concentration of credit risk, concentration of funding risk, and systemic liquidity risk
- Develop and formulate procedures and policies with respect to the best practice implementation of stress modelling and associated risk management protocols
Who should attend
Target audience
- This course is suitable for all those working in the banking industry, as well as wealth managers, auditors, and treasury and product control professionals.
- Target Competencies
- Regulation compliance
- Scenario generation
- Stress testing - methodological issues
- Best practice implementation of stress modelling
- Thought leadership
Methodology
Learning approach
- This course will cover a wide range of learning methods including explanatory slides, case studies, and detailed examination of Excel models in an interactive workshop style environment.
Course content
Course outline and key learning areas
Module 1
Understanding The Role Of Regulatory Bank Capital
- Overview of financial statements of banks – accounting principles
- Composition of the balance sheet – types of assets and liabilities
- Understanding the key elements of the P&L - statement of income
- Review of the distinction between the banking book and the trading book
- The equity capital of financial institutions
- Illustration of the contrast between liquidity and solvency issues
- Distinguish between going concern and gone concern capital
- Explanation of bail-in able capital
- Accounting and regulatory definitions for own funds
- Prudential filters and revaluation reserves, AOCI
Module 2
Requirements for Qualifying Capital under Basel III
- Definitions of Regulatory Capital – Core Tier 1, Tier 2
- Core Tier 1 – equity capital and disclosed reserves
- Supplementary Capital – Tier 2 – subject to discretion of supervisor/central bank
- Hybrid capital – Contingent Capital Instruments (CoCo’s)
- Subordinated debt - bail-in instruments
- Short-term subordinated debt covering market risk (Tier 3)
- Loss absorbency requirements
- Deductions from capital – goodwill and subsidiaries
- Supervisory discretion over cross holdings of other banks
Module 3
Basel Treatment of Market Risk
- Value at Risk (VaR) – rationale, theory and methods of calculation
- Limitations of parametric VaR
- What about tail risk – does VaR capture this adequately?
- Expected Shortfall and FRTB
- Risk weightings for market risk
- Standardized approach
- Interest rate risk in both the trading book and banking book
- Overview of Internal Models Approach (IMA)
- Impact of market risk on instruments in the trading book
- Volatility and market stress
Module 4
Operational Risk under Basel
- Definition of Operational Risk introduced into the Basel II framework
- The life cycle of Operational Risk
Module 5
Basel measurement approaches to be phased out by 2023
- Basic Indicator
- Standard Approach
- Advanced Measurement Approaches
- Revised Standardized Approach replaces previous three methods
- Risk weightings under each approach
- Rogue trading – severity of losses
- Scenario generation – KRI’s, management involvement in adverse scenario modelling
- Quantifying the exposure and severity of “outliers” and tail risk
- Loss Distribution Approach (LDA) and Scenario Based Analysis (SBA)
- Application of VaR techniques to operational risk (Op VaR)
FAQ
Frequently asked questions
What does Basel III, Risk Assessment and Stress Testing cover?
This course covers Accounting and Finance through a structured five-day outline focused on practical application, discussion, and implementation planning.
When is the next available session?
The next scheduled session starts on 18 - 22 May 2026, with additional classroom dates and mirrored Online / Live options listed in the course schedules section.
Who should attend this course?
This course is suitable for all those working in the banking industry, as well as wealth managers, auditors, and treasury and product control professionals., Target Competencies, Regulation compliance
How can I register for a session?
Use any Register button next to the available course dates to open the participant registration page and submit your booking request for the selected session.
Is this course available online as well as classroom-based?
Yes. The course detail page includes both classroom sessions and Online / Live sessions, with online options aligned to the same course dates for easier planning.
Where are classroom sessions delivered?
Current classroom venues include Munich, Amsterdam, London, Istanbul, Vienna, Barcelona, Paris, Frankfurt.
Still Have Questions?
Contact the academy team for course details, delivery options, and delegate guidance.
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