Risk management

Risks arise in almost every part of an organization and risk management has emerged as one of the most important challenges facing enterprises today. Risk management refers to the identification, measurement, monitoring and mitigation of potential losses. Today most organizations have formalized intricate systems and processes to address the many risks they encounter. Lucas and Associates brings deep industry experience in risk management and offers a wide variety of programs that range from broad overviews of enterprise risk management to modules to those that focus on specific types of risk like liquidity, operational and credit.

Fundamentals of Risk Management

Financial Risk Management: Focus on Banking & Capital Markets

Anti-Money Laundering

Credit Risk Management

Best Practices and Pitfalls of Corporate Governance

Key Risk Indicators

Enterprise Risk Management

Liquidity Risk Management

Operational Risk Management

Operational Risk of Financial Derivatives

Credit Risk of OTC Derivatives

Fundamentals of Risk Management

Risks arise in almost every part of an organization and risk management has emerged as one of the most important challenges facing enterprises today. This two day course, delivered by a Financial Risk Manager (FRM®), provides participants with a comprehensive framework for identifying and assessing exposures within an organization. In reviewing the main types of risk, participants will learn the principal assessment tools and approaches to how exposures can be effectively managed.

Duration: Two days

Program Level: Basic

Prerequisites: There are no prerequisites

Learning Objectives

Define risk and explain enterprise risk management
Identify major types of risk within an organization
Describe a framework for enterprise risk management and the role it serves in an organization
Describe the implications that a defined risk culture has on corporate governance
Discuss risk assessment tools and measurement techniques
Describe various risk controls in an organization
Distinguish among activities related to risk transfer, exclusion or reduction

outline/topics

Day 1

Introduction
- Defining risk
- Impacts of risk
- Types of risk
- Risk, uncertainty and reward
- Brief history of major failures in risk management
Business Strategy and Risk Coverage
- Credit
- Liquidity
- Strategic/Business/Reputation
- Market
- Operational
- Compliance/Legal/Regulatory
- Financial
- Capital adequacy
Risk Appetite
- Risk tolerance
- Risk appetite statement
- Link to business strategies and objectives
Enterprise Risk Management Principals & Framework
- Principals of risk management
- Risk management framework
- Architecture
- Strategy
Culture, Governance and Policies

Day 2

Day 1

Risk Data and Infrastructure
- Data capture and collection
- Data integration
- Data analysis
- Information systems requirements and best practices
Measurement and Assessment
- Approaches and methodologies
- Measurement techniques
- Risk classifications and matrix
- Risk ratings
- RAROC
- Failure mode and effect analysis
Risk Controls
- Inherent vs residual risk
- Features of a control environment
- Types of controls
Responses
- Risk transfer & insurance
- Hedging and risk reduction
- Exclusion
- Stress testing

Financial Risk Management: Focus on Banking & Capital Market

Dangers that are inherent in the financial system make understanding risk management essential for anyone working in, or planning to work in, the financial sector. This three day course provides participants with a comprehensive review of the major techniques used to identify and measure various financial risks and analyze how these risks can influence financial institutions. Participants will also learn about recent regulatory changes designed to assist financial institutions manage their risk exposures.

Duration: Three days

Program Level: Basic

Prerequisites: There are no prerequisites

Learning Objectives

Discuss major types of financial risk and how they influence various financial institutions
Define and calculate various statistical measures of risk
Identify, explain and distinguish among risks associated with different types of securities
Define and calculate Value at Risk (VaR) and explain the various approaches for estimating VaR
Explain and calculate expected shortfall (ES) and compare and contrast VaR and ES
Explain the difficulties in backtesting a VaR model
Describe the risks associated with public and private fund investing
Define credit risk and explain the components of credit risk evaluation
Describe quantitative measurements and factors of credit risk, including probability of default, loss given default, exposure at default, expected loss and time horizon
Define liquidity risk and identify the factors that contribute to liquidity risk
Compare Basel III to the previous Basel Accords
Compare and contrast Basel III to Dodd-Frank and other global financial legislation
Describe the Basel Committee’s seven categories of operational risk
Define model risk; identify and describe sources of model risk
Describe the challenges involved with quantifying model risk
Explain different approaches for calculating regulatory capital
Distinguish between regulatory and economic capital
Describe the RAROC methodology and its benefits

outline/topics

Day 1

Introduction
- Defining risk
- Impacts of risk
- Types of risk
- Risk, uncertainty and reward
- Brief history of major failures in risk management
What risk means to:
- Commercial banks
- Investment banks
- Insurance companies
- Pension plans
- Mutual funds
- Hedge funds
Volatility, correlation, statistical risk measures
Focus on Value at Risk (VaR)
Equity Risk
Fixed income risks
Derivatives risks
Foreign exchange risk

Day 2

Day 1

Investment Fund Risks
Trading and Execution Risk
Liquidity & Market Risk
Credit Risk
Credit Value at Risk

Day 3

Day 1

Day 3

Regulatory frameworks
Operational Risk
Model Risk
Economic Capital and RAROC

Anti-Money Laundering

Money laundering is the process that criminals use to disguise the true origin of cash by introducing it into legitimate businesses and systems. While its origins date back centuries, today it has grown in sophistication, size and speed with the advancement of technology and globalization. In response to this, individual financial institutions, regulators and governments have taken measures to combat this serious issue. This one day introductory course will explain what money laundering is, who the main participants are, the methodologies and processes used, and the ways in which it is being addressed.

Duration: One day

Program Level: Basic

Prerequisites: There are no prerequisites

Learning Objectives

Define money laundering and explain why it exists
Explain the process of money laundering as well as the markets and systems used
Identify key players in this activity
Explain what financial institutions are doing to combat this crime
Describe laws and regulations that address money laundering

outline/topics

1 Day Program

Introduction
- Definition of money laundering
- Motivation of offenders
- Criminal activity
- Tax avoidance
- Legitimacy
- Money laundering lifecycle
Preventative Measures
- Know Your Customer
- Due diligence
- Compliance Officer
- Establishing key personnel
- Policies, procedures, internal controls
- Three lines of defense
Controls at the business unit level
- Management action triggers
Training
Technology
Regulations
- Bank Secrecy Act
- FINRA Rule 3310
- Patriot Act, Title III
- Office of Foreign Assets control (OFAC)
- Sanctions
Summary and Questions

Credit Risk Management

This one day program offers participants a thorough introduction to the concepts and tools that will assist them in understanding credit risk and risk management. The course also introduces participants to the framework for conducting credit analysis and the basic elements of projecting financial statements as well as modern techniques for mitigating this risk.

Duration: One day

Program Level: Basic

Prerequisites: There are no prerequisites

Learning Objectives

Establish a structured framework for credit risk analysis
Evaluate a firm’s market position, competitive strengths, weaknesses, and ability to execute on a business strategy
Evaluate the debt structure of a company and its collateral base
Identify significant areas of risk in a firm’s financial statements
Calculate and interpret key ratios used to evaluate a firm’s creditworthiness
Analyze cash flows to evaluate the repayment prospects of a firm
Understand methods for mitigating credit risk

outline/topics

1 Day Program

Introduction to Credit Analysis
- Role of credit risk analysis
- Framework for credit risk analysis
- Rating agencies’ methodologies
- Regulatory considerations
Debt Structure Analysis
- Composition of capital structure
- Debt instruments, commitments and arrangements
- Off-balance sheet items
- Sources and uses of cash
- Credit agreement basics
Business and Industry Analysis
Ratio Analysis
Credit Risk Management
- Collateral
- Reserves
- Credit Value Adjustments
- Early termination
- Risk monitoring
Summary and Questions

Key Risk Indicators

This one day program will focus on Key Risk Indicators (KRI) and the best practices for their effective use. The course will define and compare KRIs to Key Performance Indicators and their practical applications. The monitoring and value assessment of KRIs will also be examined as the use of this risk management tool is constantly a work in motion.

Duration: One day

Program Level: Basic

Prerequisites: There are no prerequisites

Learning Objectives

Define a Key Risk Indicator
Explain the difference between KRIs and Key Performance Indicators
Discuss root causes as they relate to KRIs
Explain the framework for developing KRIs
Describe challenges in developing KRIs
Identify characteristics of successful KRIs
Identify sources of information
Assess KRI monitoring, communication and value

outline/topics

1 Day Program

What are Key Risk Indicators?
- Relationship to KPIs
- Common challenges
- KRIs as leading indicators
- Root cause events
- Intermediate events
KRI Framework
Risk Appetite
Defining and maintaining a KRI framework
Selecting KRIs
Linking objectives and strategies to risks
KRIs as a strategic management tool
Core Elements of Well-Designed KRIs
Sources of Information
Guidelines for Best Practices
Common KRIs for financial firms
Communication and Reporting
Procedures and policies
Summary and Questions

Enterprise Risk Management

Risks arise in almost every part of an organization and risk management has emerged as one of the most important challenges facing clearing agencies today. This one day course provides participants with a comprehensive framework for identifying and assessing exposures within an organization. In reviewing the main types of risk, participants will learn the principal assessment tools and approaches to how exposures can be effectively managed.

Duration: One day

Program Level: Basic

Prerequisites: There are no prerequisites

Learning Objectives

Define risk and explain enterprise risk management
Identify major types of risk within a clearing agency
Describe a framework for enterprise risk management and the role it serves in an organization
Describe the implications that a defined risk culture has on corporate governance
Discuss risk assessment tools and measurement techniques
Describe various risk controls in an organization
Distinguish among activities related to risk transfer, exclusion or reduction

outline/topics

1 Day Program

Defining risk
- Impacts of risk
- Types of risk
- Risk, uncertainty and reward
- Brief history of major failures in risk management
Business Strategy and Risk Coverage
- Credit
- Liquidity
- Strategic/Business/Reputation
- Market
- Operational
- Compliance/Legal/Regulatory
- Financial
Risk Appetite Framework
- Linkage to business strategies and objectives
- Principals of risk management
- Risk management framework
- Architecture
- Strategy and objectives
- What is a risk culture?
- Risk culture and risk strategy statement
- Implications for Corporate Governance
- Risk-related policies
Measurement and Assessment
- Approaches and methodologies
- Measurement techniques
- Risk classifications and matrix
- Failure mode and effect analysis
Risk Controls
- Lines of defense
- Inherent vs residual risk
- Features of a control environment
- Types of controls
Summary and Questions

Lucas & Associates

Lucas & Associates

Risk management

Fundamentals of Risk Management

Learning Objectives

outline/topics

Day 1

Day 1

Day 1

Day 2

Day 1

Day 1

Financial Risk Management: Focus on Banking & Capital Market

Learning Objectives

outline/topics

Day 1

Day 1

Day 1

Day 2

Day 1

Day 1

Day 3

Day 1

Day 3

Anti-Money Laundering

Learning Objectives

outline/topics

1 Day Program

Credit Risk Management

Learning Objectives

outline/topics

1 Day Program

Key Risk Indicators

Learning Objectives

outline/topics

1 Day Program

Enterprise Risk Management

Learning Objectives

outline/topics

1 Day Program

Lucas & Associates

Risk management

Fundamentals of Risk Management

Learning Objectives

outline/topics

Day 1

Day 1

Day 1

Day 2

Day 1

Day 1

Financial Risk Management: Focus on Banking & Capital Market

Learning Objectives

outline/topics

Day 1

Day 1

Day 1

Day 2

Day 1

Day 1

Day 3

Day 1

Day 3

Anti-Money Laundering

Learning Objectives

outline/topics

1 Day Program

Credit Risk Management

Learning Objectives

outline/topics

1 Day Program

Key Risk Indicators

Learning Objectives

outline/topics

1 Day Program

Enterprise Risk Management

Learning Objectives

outline/topics

1 Day Program

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