Course Background:
1. In 2016, the former China Banking Regulatory Commission issued the Guidelines for Comprehensive Risk Management of Banking Financial Institutions, which requires a comprehensive risk management system, covering all business lines (domestic and foreign currencies, domestic and foreign currencies, domestic and foreign balance sheets), covering all branches, positions and personnel, covering all risk types and the interaction between different risks, and running through all management links of decision-making, implementation and supervision.
2. From a practical point of view, large state-owned banks and major joint-stock banks attach relatively high importance to comprehensive risk management, while small and medium-sized commercial banks and urban rural businesses have lagged behind in the start of comprehensive risk management, and their main efforts are all focused on credit risk management, and the degree of refinement of comprehensive risk management needs to be improved urgently. In particular, after the asset scale has developed to a certain stage, the necessity and urgency of building a comprehensive risk management system have become more and more prominent in the context of strong supervision and strict supervision. What is the risk environment facing commercial banks? What is the core essence of the supervisory departments in overall management? How do the responsibilities of the board of directors, the board of supervisors, the risk management department, and the business operation line of a commercial bank be divided in risk management? How are the risk management responsibilities of the three lines of defense defined? How are all kinds of risks implemented by the responsible departments? How are the indicators of risk appetite set and transmitted? Is the loss of credit assets the responsibility of the account manager? Why can't the risk system control all kinds of risks? How are the various risks of commercial banks interrelated and contagious? What management tools do commercial banks have for all kinds of risks? How do we achieve effective isolation and effective control in product design, job process setting, and division of departmental responsibilities? How do we implement the consistency of risk management throughout the group? Through the study of this course, we will lead you to deeply study the core essence of the comprehensive risk management guidelines for supervision and the excellent practices of the industry in the practice of comprehensive risk management.
Benefits for students:
1. Vernacular version of comprehensive risk management. Banks operate risk, but when it comes to specific risks, especially comprehensive risks, it often gives people the impression that it is the business of the leadership, the head office, and the science and technology department. The ultimate goal of comprehensive risk management is to create a unified risk management culture across the bank. This course will be combined with the "Measures for the Capital Management of Commercial Banks" and the "Guidelines for Comprehensive Risk Management of Banks and Financial Institutions" officially issued on November 1, and the two teachers will work together to explain the "14-character truth" required by comprehensive risk management - identification, quantification, control, monitoring, reporting, mitigation and transfer in a language and ideas that everyone can understand.
2. Implement the new regulations according to local conditions. In the process of interpreting the New Capital Agreement, the main individual risk management and the construction of the comprehensive risk management system, this course will state the following major points through case explanation: first, comprehensive risk management needs to be paid attention to by the top management, and corporate governance should be combined with the risk management structure and model; second, it is necessary to completely solve the problem of operation and risk control; and fourth, it is necessary to form a unified risk concept and culture of the whole bank.
3. On the basis of a comprehensive interpretation, combined with the needs of second- and third-tier banks, focus on sorting out the key points of individual risk management and system construction, including credit, operation and compliance, and practice, practice and implementation.
Teaching Target:
It is suitable for senior executives of commercial banks, financial holding groups, guarantee companies, small loan companies and other institutions, risk management department, credit department, audit department and other relevant departments that implement comprehensive risk management.
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A wonderful review of previous courses
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Course outline
Module 1: In-depth analysis of comprehensive risk management
I. Risk Environment Faced by Banks and Financial Institutions
(1) Credit risk
(2) Market risk
(3) Operational risks
(4) Liquidity risk
(5) Compliance risks
(6) Reputational risk
(7) Outsourcing risk
(8) Model risk
2. The core essence of the comprehensive risk management guidelines
1. Background of the introduction of comprehensive risk management
2. The main idea of comprehensive risk management
3. Principles of comprehensive risk management
4. Five main elements of risk management system
3. Organizational structure and elements of comprehensive risk management
(1) Comprehensive risk management governance structure
1. Responsibilities of the Board of Directors, the Board of Supervisors and senior management
2. Responsibilities of the lead department of the comprehensive risk management system
(1) How to divide the boundaries of responsibilities of the three lines of defense
(2) How to consolidate the risk management responsibilities of each line of defense
(3) Analysis of the pros and cons of the system of the main responsible person
3. The main responsibilities of various risk management departments
(1) How to implement the lead department of comprehensive risk management
(2) How do the responsible departments for reputational risk, compliance risk, strategic risk, technology risk, and liquidity risk management cooperate?
and (3) who is responsible for reporting risks in corporate, retail and financial market operations
(4) Who is responsible for the consistency of risk management of the group's consolidated institutions
(5) Who is in charge of the risk of consumer rights protection
(2) Core elements of comprehensive risk management
1. Comprehensive risk management strategy and comprehensive risk management strategy
(1) What is a risk management strategy, risk management strategy, and risk culture?
(2) What is the relationship between the three?
2. Risk appetite, risk limit and asset allocation of commercial banks
(1) What is the risk appetite of commercial banks?
(2) How to set the risk appetite indicator?
(3) How to effectively transmit risk appetite?
(4) How to set credit risk limits (region, industry, customer and product)?
(5) What is the idea of setting the risk limit in market risk?
(6) What is the relationship between risk limit and asset allocation?
(7) What is the relationship between asset allocation and capital management?
3. Credit risk, market risk and operational risk management tools
(1) Credit risk management tools--- investment policy, authorization management, risk system, risk limit, risk warning, risk classification, rating collateral, risk measurement, model verification, stress testing, loan collection, asset securitization, loan transfer, restructuring and write-off, etc.
(2) Market risk management tools--- risk limits (trading limits, risk limits, stop-loss limits), authorization management, market value revaluation, risk monitoring, risk reporting, gap analysis, duration analysis, foreign exchange exposure analysis, sensitivity analysis, VaR value measurement, and economic capital allocation, scenario analysis and stress testing, hedging, write-off, etc.
(3) Operational risk management tools--- operational risk self-assessment, business continuity plan, emergency plan, risk report, loss data analysis, case Pareto analysis, incompatible position sorting, key risk point investigation, employee bad behavior investigation, counter business monitoring system, etc.
4. What are the requirements for comprehensive risk management for regulatory on-site inspections?
Focus on risk strategy, focus on preference transmission, pay attention to consolidated risk, pay attention to...
5. Conflicts and control ideas for online and offline business risk management
Comprehensive risk management requirements cover domestic and foreign currencies, on- and off-balance sheets, and onshore and offshore. The difference between the risk management and control mode of online business and offline business, which has developed rapidly in recent years, is a major issue in the field of risk management and control of commercial banks. From the perspective of comprehensive risk management, how to break through the risk management of commercial banks, and how to establish our management and control ideas and management tools.
6. Comprehensive Risk Management and the Core Principles of Effective Banking Supervision
The relationship between comprehensive risk management and the core principles of effective banking supervision is the core and key to our understanding of comprehensive risk management. The Measures for the Administration of Capital came into effect on 1 January 2024. How commercial banks should implement and do a good job in the measurement and allocation of relevant risk economy capital under the guidance of capital management measures, so as to realize the effective allocation of assets of commercial banks.
Module 2: Interpretation of the New Capital Agreement and the Construction of a Comprehensive Risk Management System - Taking the release of the new regulations as an opportunity to achieve independent operation and independent risk control
The first part is to take the release of the new regulations as an opportunity to build a comprehensive risk management system
1. Measures for the Management of Capital of Commercial Banks (Version 1.0 and Version 2.0)
Illustrate:
The Measures for the Management of Capital of Commercial Banks (for Trial Implementation) is referred to as version 1.0
The Measures for the Management of Capital of Commercial Banks (hereinafter referred to as version 2.0).
1.1 Conceptual Definitions and Interpretations of Version 1.0 and Version 2.0
1.1.1 The Basel Committee publishes the Basel Accords (I., II., III.) and the Basel III (final) history
1.1.2 The three pillars and three risks jointly construct the most important content of corporate governance of financial institutions
1.1.3 Lessons learned during implementation after version 1.0
1.1.4 Version 2.0 VS Version 1.0 10 major changes
Summary: An overview of the development history of epic regulatory documents
1.2 Interpretation of the (former) CBRC's Guidelines for Comprehensive Risk Management of Banking and Financial Institutions
1.2.1 Background
1.2.2 The Guidelines are different from the Measures for the Management of Capital of Commercial Banks
1.2.3 Guidelines and the Measures for the Management of Capital of Commercial Banks to jointly build a comprehensive risk management system (mind map)
1.2.4 Product innovation without whole-process risk management control must be creating risks
Summary: Product and business system construction of the Rural Revitalization Department/Rural Revitalization Business Department in the context of rural revitalization (logical map)
1.3 Risk definition and summary of key risks
1.3.1 The understanding of the definition of "risk" is the starting point for the construction of a comprehensive risk management system
1.3.2 Major Risks Faced by Financial Institutions (Logic Map)
1.4 Expected losses, unexpected losses, reserves and capital
1.4.1 Expected losses rely on provisions, unexpected losses rely on capital, and stress losses rely on the second pillar
1.4.2 Three capitals that must be understood: accounting capital, economic capital, and regulatory capital
1.4.3 There are two major ratios that must be understood: capital adequacy ratio and leverage ratio
1.4.4 Profits, provisions, and capital together constitute the three lines of defense to offset losses
1.5 Three pillars and three risks
1.5.1 Version 2.0 vs Version 1.0 Major Changes in the Three Pillars
1.5.2 Differentiated Regulatory Classification Standards Reflected in Version 2.0 (Figure)
Brief summary:
1. "EL, UL, Capital Adequacy Ratio, Leverage Ratio under the Internal Assessment Method" (logic map)
2. The basic structure of the three pillars (logic map)
3. Overall Framework (Logic Map)
3.1 Measurement method by risk
3.2 Classification by Assets
4. Three-level bank classification standard (logic map)
5. Construction of a comprehensive risk management system
5.1 Capital-based risk management operation mechanism
5.1.1 Basic System for Comprehensive Risk Management (Logic Map)
Establish a comprehensive risk management framework based on an in-depth understanding of the new regulations and guidelines [Consultation Project Results]
5.1.2 Capital Adequacy Assessment Procedure (Logic Map)
Brief summary:
1. Corporate governance and comprehensive risk management of financial institutions are naturally coupled
2. Data governance is the foundation of all strategies and the starting point of all work
2.2 Risk Appetite Settings
2.2.1 Reference factors in the process of formulating risk appetite
2.2.2 Risk Appetite Statement (Sample)
2.3 The "Three Lines of Defense" of Risk Management
2.3.1 The setting of three lines of defense and core responsibilities of individual risk management
2.3.2 The setting of three lines of defense and core responsibilities of comprehensive risk management
2.3.3 Hot issues
1) Comprehensive risk management is not the business of the risk management department
2) The risk manager is stationed in the manufacturing process and the risk is fully retreated
2.4 Horizontally improve the risk management organization system
2.4.1 Establish, formulate, and improve the content and objectives of individual risks
2.4.2 Establish comprehensive risks, formulate and improve content and objectives and tasks
2.4.3 Risk Management Framework (Logic Map)
1) Risk management framework
.Description of the responsibilities and core functions of the Board of Directors .Description of the committees and core responsibilities of the Board of Directors
Description of the responsibilities and core functions of the Board of Supervisors
Responsibilities and core functions of senior management Descriptions of committees and core responsibilities of senior management
Description of the responsibilities and core functions of the Chief Risk Officer (if established).
2.5 Vertically improve the risk management organization system
2.5.1 Consulting case of "Comprehensive Risk Management System Planning" of a bank
2.5.2 The assignment of risk managers must not evolve into a comprehensive retreat from risk control [Lessons and Cases]
2.6 Perfect risk management process
2.6.1 Guiding logic structure: risk management strategy, risk appetite, risk limit and risk management planning
2.6.2 Policy approach to risk management
1) Comprehensive risk management methods 2) Individual risk processes and systems
3) Capital measurement system 4) Risk data aggregation management system
5) Comprehensive risk management reporting system 6) Stress test management system
7) Product Innovation Management System 8) Internal Capital Adequacy Assessment Procedures
9) Emergency/recovery plan management system
2.6.3 Risk management information system and data quality
1) The core content of the construction of the risk management information system
2) The core content of the construction of the data standard system and the data quality control system
2.6.4 Internal control and design system
2.7 Experience sharing in the construction of risk culture
2.7.1 Introduction to the "Opinions on the Implementation of Comprehensive Credit Risk Management".
What small and medium-sized banks should do in the process of building a comprehensive risk management system [Experience sharing]
2.7.2 Introduction to the core content of comprehensive risk management of credit business
1) Pre-loan system construction 2) Review system construction
3) Post-loan system construction 4) Guarantee system construction
3. The necessity of system construction
3.1 Regulatory requirements 3.2 Market constraints 3.3 Competition needs 3.4 Internal management requirements
Part 2 Individual Risk Management and System Construction
1. Credit risk management
1.1 Definition
1.2 Main distribution
1.3 Three lines of defense are set up
1.4 Identification, measurement, monitoring, reporting and control of credit risk
Identification mechanism Internal rating system Asset risk classification management system
Economic capital measurement, monitoring and reporting system, unified credit management system
Portfolio Limit Management Credit Business Authorization Management System
Industry credit policy and corporate customer list system management system
Credit Business Guarantee Management System Credit Risk Asset Impairment Provision System
Non-performing assets collection and disposal management system
1.5 Specific Applications
1.5.1 Internal Rating System (Logic Map)
1.5.2 Legal person customer list system management and hierarchical application
1.5.3 Calculation method of theoretical value of credit line (example)
1.5.4 Basic System of Guarantee Management (Logic Map)
1.5.5 Group customer management
1) Classification criteria 2) Organizational chart (template)
3) Management Overview Diagram (Template) 4) Example of post-loan inspection process for group customers (Figure)
1.5.6 Post-loan management system framework construction (figure)
1.5.7 Asset Risk Classification
1) Provisions at the regulatory level 2) Provisions at the accounting level
3) In-depth understanding of the core essence of regulatory scale and self-measurement
1.5.8 Impact of the New Capital Agreement
Overall characteristics: from virtual to real, choose the best and abandon the inferior
1) Impact analysis of Tier 1 banks
Real estate development loans, corporate credit (project financing loans), retail credit
.Non-bank cooperation.Off-balance sheet business.Defaulted loans
2) Impact analysis of Tier 2 banks
Differences in the rules for the use of the weighting method between the second and first tranche banks
and 3) the weight-based measurement rules unique to third-tier banks
4) Changes to the new internal assessment method (only applicable to Tier 1 banks).
Brief summary:
1. Classification order of risk exposure of banks in the first and second tiers (Figure)
2. Capital measurement rules for asset management products (Chart)
3. Rules for Measuring Capital Exposed to Real Estate Risk (Chart)
4. Classification rules for corporate risk exposure (Figure)
5. Rules for measuring the capital of the second tranche of banks (chart)
6. Rules for measuring the capital of the third tier of banks (chart)
7. Market Risk Management (Bank Book Interest Rate Risk)
2.1 Definition of Concepts
2.2 Three lines of defense are set up
2.3 Identification, measurement, monitoring and reporting and control of market risks
Introduction to the construction of 7 systems
2.4 Impact of the New Capital Agreement
2.4.1 The main differences between the standard method of simplifying market risk and the current standard method
2.4.2 The main ideas of the new standard method of market risk
2.4.3 List of changes in the new internal model method of market risk
2.5 Specific Applications
"Statistical Table of Market Risk Limit Management"
3. Operational risk management (IT risk, legal risk, outsourcing risk)
3.1 Definition
3.2 Three lines of defense set
3.3 Identification, measurement, monitoring and reporting and control of operational risks
1) Introduction to the construction of 8 systems
2) IT risk assessment indicators
3) Key areas of legal risk management
3.4 Impact of the New Capital Agreement
3.4.1 New standard method and new basic index method
3.5 Special chapter on the construction of operational risk system
1. Discuss the interpretation of the key content of the draft
1. Definition of concepts
1.1 Definitions 1.2 Overall Objectives
Relationship with a comprehensive risk management system
1.3 Follow the principles
1.3.1 Basic Principles 1.3.2 Operational Resilience [6 Elements] 1.3.3 Regulatory Responsibilities
2. Risk management requirements
2.1 Institutional content [4 items] 2.2 Preference transmission 2.3 Management information system 2.4 Risk culture
2.5 Assessment and evaluation 2.6 Training 2.7 Information disclosure
2. Operational risk management system
1. Define the classification
1.1 Risk Classification [4 Categories] 1.2 Risk Definition [4 items] 1.3 Risk Events [7 Categories] 1.4 Risk Event Classification [3 Categories]
2. Governance responsibility
2.1 Responsibilities of senior management [5 items] 2.2 Responsibilities of various departments [6 items] 2.3 Responsibilities of the Risk Management Department [4 items]
2.4 Responsibilities of the Internal Control and Compliance Supervision Department [7 items] 2.5 Responsibilities of the Legal Affairs Department 2.6 Responsibilities of the Safety and Security Department [6 items]
2.7 Responsibilities of the Ministry of Science and Technology [4 items] 2.8 Responsibilities of the Finance and Accounting Department [4 items]
2.9 Branch Responsibilities
2.9.1 Responsibilities of each department [4 items] 2.9.2 Responsibilities of the internal control and compliance supervision department [7 items] 2.9.3 Responsibilities of the risk management department
3. Preference for a quota strategy
3.1 Continuous monitoring of all departments 3.2 Internal control and compliance correction and back-inspection
4. Manage the process
4.1 Identification and Assessment
4.1.1 New products and systems are launched 4.1.2 Post-evaluation of existing products 4.1.3 Risk assessment of triggered operations [5 items]
4.2 Monitoring
4.2.1 Responsibilities of the Internal Control and Compliance Supervision Department 4.2.2 Responsibilities of each department [4 items]
4.3 Metering
4.3.1 Loss Data Management Mechanism 4.3.2 Regulatory Capital Measurement System 4.3.3 Stress Testing
4.4 Reporting
4.5 Control and mitigation 4.5.1 Handling of catastrophic events 4.5.2 Hidden danger rectification mechanism
4.5.3 Reward mechanism for reporting, resisting, intercepting, inspecting and supervising violations of laws and regulations or major operational risk events
4.5.4 Construction of operational risk management system
5. Prevention and control in key areas
5.1 Case Risk Management 5.2 Information Technology Risk Management 5.3 Legal Risk Management
5.4 Counter Business Operation Risk Management 5.5 Vault Operation Risk Management
5.6 Offline credit business operation risk management 5.7 Online credit business operation risk management
5.8 Risk Management of Bank Card and Electronic Channel Operations 5.9 Risk Management of Fraud Operations
5.10 Business Continuity Management 5.11 Employee Abnormal Trading Behavior Investigation Mechanism
5.12 "Three lines and one grid" management mode
6. Liquidity risk management
6.1 Concept Definition 6.2 Three lines of defense are set up
6.3 Identification, measurement, monitoring, reporting and control of liquidity risks
1) Introduction to the construction of 11 systems
7. Compliance risk management (money laundering risk, sanctions risk)
7.1 Concept Definition 7.2 Three Lines of Defense 7.3 Specific Applications
Compliance Risk Management Assessment Form (Sample Form)
7.4 Special chapter on the construction of compliance risk system
1. Interpretation of compliance risk guidelines
1. Definitions
1.1 Compliance 1.2 Compliance Risk 1.3 Compliance Management 1.4 Compliance Risk Management Objectives
2. Management system
2.1 Compliance Policy 2.2 Department Organizational Structure Resources 2.3 Management Plan
2.4 Risk identification and management process 2.5 Training and education
3. The content of the risk assessment report
4. Content of the compliance management plan
2. Compliance risk work instructions
1. Responsibilities
1.1 Internal Control Management Committee [4 items] 1.2 Internal Control and Compliance Department [8 items]
1.3 Part-time compliance managers of various functional departments [9 items] 1.4 Dispatch of risk and compliance managers [3 items]
2. How to work
2.1 Specific content of compliance risk management [2 items] 2.2 Incorporated into the bank's comprehensive risk management system
2.3 Follow the principles [4 items]
2.4 Monitoring and identification
2.4.1 Information collection and monitoring
1) Information collected and monitored by the internal control and compliance department [6 items] 2) Information materials provided by various functional departments [2 items]
2.4.2 Monitoring by functional departments [4 items]
2.4.3 Identification of compliance risks
1) Significant compliance risks [3 items] 2) Types of major compliance risk warnings [4 items]
2.5 Compliance risk reporting and disposal
2.5.1 Report Categories
1) Interim report
A. Type of interim report [3 items] B. Content of interim report [4 items] C. Disposition of interim report
2) Periodic reporting
A. Contents of periodic reports [6 items]
2.5.2 Report routes
2.6 Compliance risk management assessment
2.6.1 Assessment content
1) Assessment of the establishment of compliance mechanisms [2 items] 2) Assessment of compliance performance [3 items]
3) Evaluation of compliance management effectiveness [3 items]
2.6.2 Assessment Categories
1) Comprehensive assessment 2) Special assessment
2.6.3 Assessment method 2.6.4 Assessment process
1) Preparation of [3 items] 2) Implementation [3] 3) Report
2.6.5 Application of assessment results
3. Concentration risk
3.1 Concept Definition 3.2 Three Lines of Defense 3.3 Specific Applications
3.3.1 Multi-dimensional Scorecard for Credit Concentration Risk Assessment of Counterparties or Borrowers
3.3.2 Multi-dimensional Scorecard for Credit Concentration Risk Assessment of Local Government Financing Platform Loans
4. Strategic Risks
Strategic Risks (Logic Map)
Part 3 Information Disclosure: An important channel for the public to make peer comparisons
1. Tier 1 bank information disclosure requirements
2. Tier 2 bank information disclosure requirements
Summary: Standardized disclosures make it easy for the public to compare peers and vote with their feet
3. Third-party bank information disclosure requirements
Part 4 Answers to Hot Questions
1. In 2023, the (former) China Banking and Insurance Regulatory Commission (CBIRC) has successively promulgated five laws and one regulation, namely the 2.0 version of the new capital agreement, three measures and one provision (discussion draft), and the new five levels.
2. The impact of bonds issued by commercial banks under the new regulations
3. The impact of asset management products held by commercial banks under the new regulations
Part 5 Introduction to the experience of building a comprehensive risk management system
1. A comprehensive risk management system should accurately grasp the four principles
2. Summary of experience in pit avoidance
Don't eat the foreign, don't eat the ancient, and abandon the singles
3. Small and medium-sized banks, especially third-tier banks, have greatly simplified the cost and difficulty of compliance
Course fees
Course time: May 16-18 (May 15 is the whole day registration)
Training location: Guangxi · Guilin
For more information:
Scan the QR code to add the course advisor's WeChat
Tong Jinbei
13611182280 (same number on phone and WeChat)
"Today's Rural Credit People"
Financial professionals focus on risk research|due diligence - risk management