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

• Differentiate between Credit, Market, and Liquidity risk and their interconnected impacts on the balance sheet.
• Master the measurement and mitigation of **Credit Risk** using models like expected loss (EL) and Probability of Default (PD).
• Apply techniques for assessing and managing **Market Risk**, including Value-at-Risk (VaR) and stress testing.
• Develop and implement a robust framework for managing **Liquidity Risk** across short and long-term horizons.
• Understand the regulatory capital requirements and the role of the Basel framework in financial risk governance.
• Utilize financial instruments (e.g., derivatives, hedging) to actively manage and offset risk exposures.
• Conduct comprehensive stress testing and scenario analysis for all three risk categories.
• Develop clear risk reports and dashboards for senior management and regulatory review.

• Financial Risk Managers and Analysts
• Treasury and Investment Banking Professionals
• Credit Analysts and Portfolio Managers
• Internal Auditors focused on Financial Services
• Senior Finance and Accounting Officers (CFOs, Controllers)

• Hands-on VaR and Expected Loss Calculation Exercises
• Case Studies on Major Financial Crises (e.g., 2008, LTCM) and Risk Failures
• Group Decision-Making Scenarios on Asset-Liability Management (ALM)
• Individual Analysis of Corporate Bond Spreads and Default Risk
• Discussions on the Ethical Implications of Risk-Taking in Finance

Unit 1: Fundamentals of Financial Risk Governance

• Overview of the three main categories of financial risk and their sources.
• Introduction to the **Basel Accords** and their impact on capital requirements.
• Defining risk appetite, tolerance, and limits for financial exposure.
• The role of the Risk Committee and the Chief Risk Officer (CRO).
• Risk reporting structure and frequency for various stakeholders.

Unit 2: Credit Risk Management

• Calculating **Expected Loss (EL)**: PD x LGD x EAD (Probability of Default, Loss Given Default, Exposure at Default).
• Techniques for commercial and retail credit scoring and rating.
• Methods for collateral management and credit risk mitigation (e.g., netting agreements).
• Managing portfolio concentration risk and industry sector correlation.
• Credit derivatives and credit default swaps (CDS) for risk transfer.

Unit 3: Market Risk Measurement

• Defining market risk: interest rate, currency, equity, and commodity risk.
• Calculating **Value-at-Risk (VaR)** using historical simulation, parametric, and Monte Carlo methods.
• Understanding the limitations of VaR and the need for **Expected Shortfall (ES)**.
• Developing effective hedging strategies using forward contracts and options.
• Monitoring **Trading Book** risk and setting appropriate position limits.

Unit 4: Liquidity Risk Management

• Defining liquidity risk (funding liquidity vs. market liquidity risk).
• Implementing the **Liquidity Coverage Ratio (LCR)** and **Net Stable Funding Ratio (NSFR)**.
• Modeling cash flow projections and potential funding gaps under stress.
• Developing a robust **Contingency Funding Plan (CFP)**.
• Managing collateral availability and access to emergency funding sources.

Unit 5: Stress Testing and Integrated Risk Reporting

• Designing severe but plausible stress scenarios for combined financial risks.
• Conducting enterprise-wide stress testing and sensitivity analysis.
• Integrating the three risk categories into a single, cohesive risk report.
• Presenting complex financial risk data to executive and board audiences.
• Managing regulatory communication regarding risk models and capital adequacy.