Bank Risk Governance and Regulation
This course provides:
(1) The basic methods of risk analysis and decision making, including SWOT-Analysis, risk behavior, risk communication, hypothesis testing and the limitations for risk modeling.
(2) The evaluation of strength and weaknesses of the corporate sector for credit risk management: rating scheme, financial parameters, reasons for growth, analysis of the strategic options of a corporate, why corporates fail and go bust, corporate restructuring, credit risk and portfolio management.
(3) The characteristics of global financial markets, the impact of global players and reasons for increasing volatility. The course gives examples of financial market crises and their reasons and discusses the risks for financial stability within the next couple of years. It explains the six possible measures to stabilize financial markets and describes the major risk governance institutions and the implementation of the Banking Union in Europe.
(4) The course highlights macroeconomic challenges for the financial industry like globalization, global/environmental risks, population dynamics and the 4th industrial revolution (cyber-physical systems).
(5) Within the Corporate Governance Part are explained: the principle – agent conflict, goals and tools of Risk Governance, the Risk Management Organization of a Bank, the 3 lines of defense concept, the BIS Corp. Gov. Principles, the legal responsibilities of Bank Managers (Compliance Risk, Business Judgement Rule), the core elements of good risk governance and why Risk Committees could fail
Upon completion of this course, you will be able to understand the following concepts and their application in practice:
- Philosophical quotes, definition of risk, typical risk types for the financial industry, frequency and belief type probabilities, the role of long options within the decision making process
- The influence of risk behavior/awareness and motivation
- The difficulties of risk communication
- Systematization technics and the limitations of risk modeling
- How to analyze the success of a corporate and the challenges of corporate restructuring
- The special requirements and characteristics of financial institutions
- The nature of financial crisis
- The essentials of good and modern bank regulation, supervision and risk governance
- The goals and the concept of the European Banking Union
- The tools for micro- vs. macro-prudential Risk Management
- The meaning and consequences of “globalization”
- The major environmental global challenges of this century
- How to analyze complex problems
- Positive and negative effects of the 4th industrial revolution
- Reasons for people to get connected and other industry trends
- How to organize good risk management and governance in financial institutions
- The challenges of compliance risk management
- That management decisions need to be compliant and have to fulfill the Business Judgment Rule(BJR)
- Weaknesses in risk assessment and management evaluation
- How to prepare and manage the communication process for crucial and risky decisions
- Decision making theory
- Corporate valuation
- Bank regulation and supervision
- Risk governance: modelling vs. expert knowledge, weaknesses in risk assessment and in management evaluation
- The elements of the Business Judgment Rule
- Instruments and parameters to regulate and supervise banks
- Requirements for the target oriented communication between management and governance in financial institutions
This course is offered in the part-time Master in Finance program and may be attended on a “no credit” basis by individuals not enrolled in the program. Course participants are visitors who are not responsible for assignments and do not take an exam or earn academic credits. As the number of seats in the course is limited, we recommend to register online early.
Prof. Dr. Thomas Kaiser
Prof. Kaiser has been teaching master students on risk management for more than ten years. In his affiliation with KPMG, he is responsible for advising leading banks and insurance companies globally on Operational and Reputational Risk Management. Before joining KPMG, Prof. Kaiser has been with Deutsche Bank, Commerzbank and HypoVereinsbank specializing in Operational Risk and with WestLB working on market risk topics.
Prof. Kaiser is co-author of “An Introduction to Operational Risk” and co-editor of “Reputational Risk Management in Financial Institutions” and has written numerous articles. He is an associate editor of the “Journal of Operational Risk” and a regular speaker on Risk Management at national and international conferences as well as a member of the advisory board of FIRM (Frankfurt Institute of Risk Management and Regulation).