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Excerpt from course description

Risk Management in Banks autumn 2021

Introduction

This course is cancelled autumn 2021.

The experiences of the 2008 financial crisis have triggered a significant development of banks’ risk management. Not only the banks themselves have changed their approaches, also the regulators have taken a much more active role in overseeing the risk management functions in banks. The Basel Committee on Banking Supervision and the European Banking Authority have developed detailed guidelines on risk management, which are implemented by national authorities. Today, risk management competence is regarded as a core part of the banks’ business models.

Before the financial crisis, the focus in banks’ risk management was often on developing ever more sophisticated models for measuring and pricing complicated financial instruments and financial risks. After the crisis, the importance of strong governance in risk taking has come to the forefront in parallel with stricter capital and liquidity requirements. The society now expects banks to be proactive regarding the so-called ESG risks (Environmental, Social and Governance). However, in the Nordics, credit risk is still the dominant risk factor to the banks.  The course will reflect these developments and focus on how new and old risks can be managed in practice. Pricing and the use of financial derivatives are outside the scope of the course.

Course content

  • Banks’ business models
  • Credit risk
  • Liquidity and funding risks
  • Interest rate risk in the banking book
  • Operational risk
  • Non-financial risks (Environmental, Social and Governance risks - ESG)
  • Basel III regulations (capital and liquidity requirements)
  • Financial reporting of risks, incl  IFRS 9
  • Stress-testing
  • Governance and risk management processes - Three lines (of defense) model
  • Risk appetite
  • Recovery  / resolution

Internal Capital Adequacy Assessement Process (ICAAP) / Supervisory Review and Evaluation Process (SREP)

Disclaimer

This is an excerpt from the complete course description for the course. If you are an active student at BI, you can find the complete course descriptions with information on eg. learning goals, learning process, curriculum and exam at portal.bi.no. We reserve the right to make changes to this description.