Banking 101 - Risk Management & Asset Liability Management

Descripción

What will this course be about? In today’s complex and ever-evolving financial landscape, the successful operation of banks and financial institutions relies on a delicate balance between profitability and risk mitigation. At the heart of this equilibrium lie two fundamental pillars: Risk Management and Asset Liability Management. We will explore the significance of these crucial elements and their interplay in sustaining a stable, secure, and thriving financial institution. We'll understand how they act as the compass guiding the decisions, strategies, and overall health of banks in the midst of an unpredictable and dynamic environment. The content covered will be the following: • Basic concepts in the realm of bank steering - i.e., understanding the fundamental concepts and the synergies between risk and asset liability management. • Risk Management aspects - here we will dive deeper into the comprehensive aspects of risk management, including credit, market, and liquidity risks, and their significance in financial institutions • Asset Liability Management and Funds Transfer Pricing - i.e., among other things, exploring the critical role of FTP in pricing funds internally and how it impacts a bank's profitability and risk management strategies. • Risk Bearing Capacity and Capital Adequacy - Understanding the risk-bearing capacity of banks and the importance of maintaining adequate capital reserves to cushion against potential losses – this is embedded in, • Banking Regulation and Compliance framework - Exploring the regulatory landscape, the role of regulatory bodies, and how compliance shapes risk management practices in the banking sector.

Lo que aprenderás

• Gain a thorough understanding of Risk Management practices in banking, including in particular credit-/, market-/ & liquidity risk
• Acquire knowledge on ALM principles, including interest rate risk management, liquidity management and strategic alignment of assets & liabilities
• Grasp how financial instruments and derivatives are used in Risk Management and ALM, i.e., hedging and managing various types of financial risks
• Application of concepts of Risk Management and ALM to real-world scenarios, considering the dynamic nature of financial markets and regulatory environments

Requisitos

• Basic understanding of the economics of banking comes in handy
• Fundamental knowledge of accounting principles (e.g., how to read a balance sheet)
• Familiarity with the fundamentals of financial derivatives is advantageous