The banking Academy
The Asian Banker Diploma in Basel III Implementation
28-30 January 2013, Singapore
Hong Kong

Ensure watertight compliance to Basel III regulatory requirements whilst increasing competitive advantage

The release of the Basel III proposals and their gradual implementation kicked off a worldwide period of intense discussion and scrutiny of the guidelines and their impact which will undoubtedly continue well into this decade.

Around the globe, financial institutions are actively engaged in the complexities of the various stages of implementation of the Basel III requirements. Many regulators have either striven to set standards that are even higher than the minimum global standards or else have required banks to be Basel III compliant much earlier than the 2019 deadline.

The Asian Banker has designed a comprehensive training programme to equip senior bank management with the tools necessary for effective implementation of a watertight framework for Basel III across their organisations to meet these strict regulatory requirements.

Through careful dissection of every element of the Basel III proposals, attendees will come away with a profound understanding of the practical impact of the Basel III recommendations on every aspect of the banks’ activities. Successful implementation can thus be taken beyond the objective of simply compliance and used as a tool of competitive advantage across the business.

Strategies to ensure your organisation grabs competitive advantage through optimal risk mitigation and management will be at the core of the course with particular focus on counterparty risk and liquidity risk. Accurate measurement, modelling and stress testing of risk will also be an important aspect. Under the microscope too, will be the impact on your business of changes to the definition of capital and its regulatory treatment along with the introduction of countercyclical capital buffers.

The format of this 3-day intensive training course will be a mixture of interactive exercises and scenarios, group discussions, real case studies, focused tuition, and practical problem-solving.

This programme is designed to achieve the following goals:

• Explore and overcome the challenges in ensuring a holistic implementation of Basel III requirements
• Strengthen your counterparty risk mitigation framework through a holistic implementation of the Basel III guidelines
• Implement the Basel III international framework for liquidity risk measurement, standards and monitoring
• Examine the introduction of countercyclical capital buffers and the implications for your financial institution
• Successfully develop your risk modelling methodologies in compliance with Basel III
• Scrutinise the new Basel III definitions of capital and capital quality and the implications for your institution’s capital allocation and management framework

This important training is designed to mobilize a wide range of senior professionals whose collective skills are vital for the implementation of Basel III in the organisation, including:

• Chief Risk Officers
   Directors, Heads and Managers responsible for
• (Counterparty / Liquidity / Market / Credit / Systemic) Risk
• Basel III
• Treasury
• Enterprise Risk Management
• Risk modelling
• Stress testing
• Capital allocation / planning
• Compliance

Day 1
8.30-9.00 Registration
9.00am A focus on the worldwide introduction of Basel III and the industry reaction to the requirements for implementation
• How are banks around the globe responding to Basel III?
• Investigating how banks are changing their business strategies in response to Basel III
  - From which areas are banks pulling back?
  - How is Basel III affecting bank risk appetite?
  - New areas of focus
• How does Basel III specifically impact banks in Asia?
• How can we get the most from Basel III from an ERM perspective?
• An overview of implementation timelines in the region and the challenges faced
• The global economic uncertainty and its impact on Basel III implementation
Interactive discussion on industry reaction and challenges regarding the implementation of Basel III
  Morning Coffee break
  Exploring and overcoming the challenges in ensuring a holistic implementation of Basel III requirements
• The Basel III implementation team: Selection, management and performance benchmarking
• What are the costs of Basel III implementation?
• How does Basel III implementation impact your IT infrastructure?
• Ensuring enterprise-wide awareness of Basel III requirements and responsibilities
• Securing management buy-in for all aspects of Basel III implementation
• Optimising both internal and external reporting channels as a feature of Basel III implementation
• Putting into place internal controls and monitoring
• Ensuring a close relationship and clear communication with the regulator throughout the whole implementation process
• Sourcing and investing in technology solutions
• Managing risk throughout the implementation lifecycle
• Auditing your Basel III implementation
Practical case studies: Challenges faced to date in implementation of Basel III
12.30-2.00 Lunch
 2.00pm Strengthening your counterparty risk mitigation framework through a holistic implementation of the Basel III guidelines
• What does Basel III mean for your OTC Derivatives trading infrastructure?
  - To what extent are we moving to central counterparty clearing?
  - How can the system function satisfactorily?
  - Operational issues in moving to CCP clearing
  - Impact on the corporate client and their requirements
  - CCPs: Dangers of systemic risk
• The impact of increased governance requirements for dealing with counterparty risk
• How do the new changes in counterparty risk measurement drive your required capital?
• Aggregation of counterparty exposure
  - Transaction
  - Portfolio
  - Country
  - Counterparty: Gross vs netted
  Tea break
• Optimizing Netting rules and collateral allocation to favourably impact counterparty capital charges
• Treatment of Credit Value Adjustments under Basel III and impact on your organisational framework
  - CVA calculation
  - Pricing of CVA
  - Hedging of CVA
  - Setting up the CVA desk
  - Wrong-way risk mitigation
• Credit risk mitigation and collateral
  - Status and treatment of collateral: How does this impact your organisation?
• Basel III guidelines on use of credit ratings: What does this mean for your financial institution?
  - Use of external credit agencies
  - Internal ratings
Practical exercises: Creative compliance and the dangers of regulatory arbitrage
5.30pm End of Day One

Day 2
9.00am Implementing the Basel III international framework for liquidity risk measurement, standards and monitoring
• Are you correctly calculating your Liquidity Coverage Ratio (LCR)?
• Determining the composition and your stock of ‘high quality liquid assets’
• Establishing your total net cash outflows
• Implementing and calculating the Net Stable Funding Ratio (NSFR)
• What exactly constitutes ‘stable funding’
• Stress testing your liquidity framework
• Managing contractual maturity mismatch
• Accurately pricing your liquidity needs
• How will banks be appraised by ratings agencies in the new Basel III environment?
  - Capital
  - Risk management
  - Liquidity and funding
  Morning coffee break
• Examining the implications of Basel III on your organisation’s funding requirements and activities
• Making the most effective use of collateral for funding
• Hedging refinancing risk
• Funds Transfer Pricing strategies
• Effectively mitigating the risk of concentration of funding
Practical exercises: Principles for sound liquidity management: What are the key priorities?
12.30-2.00 Lunch

Meeting the increased regulatory demands for stress testing frameworks
• How will the regulators assess the integrity of an institution’s risk capital framework based on its stress testing?
• Forward-looking stress testing
  - What does this mean?
  - What is expected?
  - Data usage
• Creating meaningful scenarios in accordance with the institution’s activities and risk profile
  - Overcome the challenges in introducing qualitative scenarios into quantitative stress tests
• Determining realistic risk parameters: What constitutes ‘realistic’?
• Reverse stress testing: What do the regulators demand?
• Understanding and meeting the particular challenges of different types of stress testing
  - Credit risk
  - Liquidity risk
  - Market risk
• What to do with your stress test results?
  - Overcoming the challenges in obtaining organisational and management buy-in
  - Reporting of results to management and regulators
  - Strategies for remedies and action according to results
Practical case studies: Learning the lessons from stress testing in Europe.
Supervisory reviews and evaluation of stress testing processes

  Tea break
  Pulling it all together - Advanced methods for implementing “A top of the house” risk and capital framework
• Practical challenges and implications
• Replicating portfolio method
• Response surface modelling (Curve fitting)
• Copula aggregation approaches
• Portfolio optimization
5.30pm End of Day Two

Day 3
9.00am Countercyclical capital buffers and the implications for your financial institution
• Understanding the full scope of the regulatory requirements
• What is the theory based on?
  - Arguments for and against the theory / proposals
  - An analysis of macroeconomic correlations with banking activities
  - Key risk indicators for a boom-bust cycle
• Exploring scenarios when buffers would come into effect
• How exactly will the countercyclical buffer be calculated?
• Determining when would be the parameters for introduction of this buffer
• Risk of misleading signals and indicators
• How will the capital surplus be treated when the buffer returns to zero?
• An in-depth analysis of cross-border and global challenges to implementation of the countercyclical capital buffer
  - Ensuring global jurisdictional reciprocity
  - Standardisation of macroeconomic measurement and indexation
  - Fostering cooperation between national regulatory and governmental bodies
Exercises for setting scenarios and accurately calculating appropriate countercyclical capital buffers
  Morning coffee break
  The impact of Basel III on systemically important financial institutions
• What exactly makes a financial institution systemically important?
• Capital requirements under consideration for SIFIs by the regulators
• Examining the pros and cons of increased risk capital demands
  - Impact on liquidity
  - Implications for ratings
  - Cost of borrowing
  - Too big to fail?
• Coping with the increased demands of regulatory supervision and reporting requirements
Practical exercises: Calculating the costs/benefits of being a designated SIFI
  Watertight compliance to increased Basel requirements for effective corporate governance in the financial institution
• An in-depth analysis of what aspects of corporate governance failed during the financial crisis
• What lessons have been learnt?
• Determining the impact of Basel III on risk appetite
• Outlining the increased demands for board and senior management accountability, transparency and clear reporting standards
• How effective are your internal risk controls?
• Implementation of improved KRIs across the organisation
• Basel III guidelines for a restructuring of the whole system of compensation
  - Highlighting the need to crystallise the relationship between compensation, profit and risk
Practical exercises for determining your organisation’s governance culture
  Tea break
  An overall round-up and focus on the most important and topical subject areas of the three days
Interactive discussion and evaluation of the key features of the course proceedings
5.30pm End of Programme

Dr Madhu Acharyya is a lecturer in risk management at Bournemouth University, United Kingdom. He holds master degrees in mathematics and risk management and PhD in risk management. His key research and teaching interest focus on enterprise risk management including financial and operational risks, risk-based capital adequacy regulations in banking and insurance. Acharyya is currently researching on the scope and opportunities in implementing Basel III for global banks. He is the recipient of the best research excellence award from the Geneva Association, Switzerland for his research paper on enterprise risk management. Acharyya also teaches Bank Risk Management at European Business School (Regent’s College), London. Prior to entering in the academic profession, Acharyya spent 10 years working in the financial industry.

This is one of the best designed diploma programmes to prepare Asian financial institutions for the implementation of Basel III across the organisation in a commercially viable and productive manner.

Register today by completing the registration form below or contact Mr Tony Gibbons tel: +65 6236 6522 or email for more information.

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What previous attendees say:

"This has been an enriching experience"
Head of Transaction Operations, Schroder Investment Management