Upon completion of this program, participants will be able to:

• Explain the evolution of banking regulation from Basel I to the finalization of **Basel III (often called Basel IV)**.
• Calculate the components of regulatory capital (CET1, AT1, Tier 2) and understand the deduction rules.
• Apply the various approaches (Standardized, IRB, Internal Model) for calculating **Risk-Weighted Assets (RWA)** across risk types.
• Analyze the role and calibration of the capital buffers (CCyB, Conservation Buffer, SIFI surcharge).
• Understand the regulatory requirements for the **Leverage Ratio** and the **Net Stable Funding Ratio (NSFR)**.
• Evaluate the impact of Basel IV revisions (e.g., output floor) on RWA and bank profitability.
• Describe the Pillar 2 (Supervisory Review) and Pillar 3 (Market Discipline) requirements.
• Formulate a strategic capital plan to optimize capital structure and ensure continuous compliance.

• Bank Risk Management and Capital Planning Analysts
• Regulatory Reporting and Compliance Officers
• Bank Supervisors and Regulatory Authority Personnel
• Internal Auditors specializing in Capital Adequacy
• Treasury and ALM Professionals
• Financial Consultants and Accountants specializing in Banking

RWA calculation exercises (Excel-based), Case studies on capital deduction rules, Group project on assessing Basel IV impact (output floor), Workshops on LCR/NSFR calculation, Policy debates on CCyB calibration, Role-playing a SREP review meeting.

Unit 1: Basel III Foundations and Capital Structure

• Rationale for Basel III: addressing the deficiencies revealed by the 2008 financial crisis.
• Key objectives: improved capital quality, higher capital levels, and broader risk coverage.
• Overview of the three pillars: Pillar 1 (Minimum Capital), Pillar 2 (Supervisory Review), Pillar 3 (Disclosure).
• The finalization of Basel III (commonly referred to as Basel IV) and its implementation timeline.

• Defining Common Equity Tier 1 (**CET1**) and the criteria for inclusion.
• Additional Tier 1 (AT1) and Tier 2 capital instruments and their loss-absorption features.
• Deduction rules: treatment of deferred tax assets (DTAs), intangible assets, and capital holdings in financials.
• The concept of regulatory adjustments and limits on non-CET1 capital.

Unit 2: Pillar 1: Risk-Weighted Assets (RWA)

• The **Standardized Approach (SA)** for credit risk and its use of external credit ratings or standardized risk weights.
• The Internal Ratings-Based (**IRB**) Approach: Foundation and Advanced methodologies.
• Modeling Probability of Default (PD), Loss Given Default (LGD), and Exposure at Default (EAD).
• Regulatory treatment of credit risk mitigation (CRM) techniques.

• Market risk RWA: Standardized Approach (SA) and the Internal Model Approach (IMA) under the **Fundamental Review of the Trading Book (FRTB)**.
• Operational risk RWA: The new **Standardized Approach (SA)** and the Business Indicator (BI) component.
• The calculation and application of the **Credit Valuation Adjustment (CVA)** risk charge.
• Regulatory expectations for model validation and governance.

Unit 3: Buffers, Leverage, and Liquidity

• The role and calibration of the Capital Conservation Buffer (CCB).
• The Countercyclical Capital Buffer (**CCyB**) and its implementation by national authorities.
• Surcharges for Systemically Important Financial Institutions (G-SIBs and D-SIBs).
• The overall risk-based capital ratio calculation and minimum requirements.

• The **Leverage Ratio (LR)**: objectives, exposure measure, and regulatory constraints.
• Liquidity Coverage Ratio (**LCR**): calculation, HQLA requirements, and operational impact.
• Net Stable Funding Ratio (**NSFR**): objectives, available stable funding (ASF), and required stable funding (RSF).
• Regulatory expectations for the monitoring and reporting of liquidity ratios.

Unit 4: Basel IV and Implementation Challenges

• The revised standardized approach for credit risk (SA-CR).
• The new **Output Floor**: limiting the capital benefit of internal models.
• The revised operational risk capital framework.
• Impact analysis of the final reforms on bank business lines and capital strategies.

• Pillar 2: The Supervisory Review and Evaluation Process (SREP) and ICAAP.
• Pillar 3: Enhanced disclosure requirements for market discipline.
• Challenges in data aggregation, IT infrastructure, and data quality for compliance.
• Strategic implications for bank business models and risk appetite.