Since Basel regulations were first introduced in 1988, the global financial system has survived several existential threats, most notably the Global Financial Crisis, 2007-9. The fall-out from each of these crises led to important reforms to Basel standards to address revealed shortcomings. For example, Basel III recognized inadequate bank capitalization during the GFC by increasing minimum capital requirements. Basel III also formalized minimum liquidity requirements for the first time through appropriate limits and recognized the importance of contagion risk between banks by treating systemically important financial institutions (SIFIs) as a separate category. By reforming these standards, the BIS (Bank for International Settlements) hopes to mitigate fragility in the global financial system by reducing bank-level and systemic risks in countries adopting these standards. This objective ultimately serves the real economy through the uninterrupted provision of bank credit to households and firms and maintaining the payments system.

Due to repeated updates to Basel regulations since first introduced, many practitioners lack familiarity with the standards, which inhibits applying them in practice and confidently engaging with stakeholders concerning their implications. This course fills that knowledge gap. The course explains in detail how market, credit, and operational risks are treated in the most current version of the standards, Basel IV. This version includes important updates, such as the market risk amendment (2016), which changed the way both market risk and credit risk capital charges are calculated for traded securities, changes to the standardized approach for credit risk, which impacts capital charges for banking book positions, and an entire replacement of prior methods to calculate operational risk. The course also provides instruction on other important developments that practitioners need to know, such as IFRS9, which replaced IAS39 with important consequences for credit risk provisions, and climate-related financial risks, which banks have now started including in their stress-tests.

This highly interactive course provides a thorough understanding of Basel regulations in their entirety. The course includes several worked examples and delegate exercises to deepen understanding and awareness. No prior knowledge of Basel regulations is required.

• Key Highlights:
  
  • Gain a thorough understanding of current Basel regulations across all risk types
  • Appreciate how Basel regulations have evolved over time
  • Understand the regulations for climate-related financial risks
  • Be able to calculate essential regulatory metrics