Operational Risk Assessment SeminarFederal Reserve System Courses

Type of Participant Targeted

This program is for examiners with 12 to 24 months of field examination experience.

Prerequisites

Participants will receive a pre-seminar reading assignment that prepares them for case study group work during the seminar. This assignment will take approximately four hours to complete.

Course Overview

This seminar is designed to provide examiners and supervisory staff with an understanding of supervisory guidance regarding operational risk and risk management principles; a practical understanding of key risks inherent in core banking activities, management controls, and risk-mitigation techniques; and a fundamental understanding of the approaches to and challenges of quantitative analysis of operational risk. The seminar is also designed to provide a framework for assessing risk, evaluating risk management, and crafting an appropriate supervision and examination strategy. The seminar also includes a basic introduction to issues and quantitative analytical considerations relevant to Basel II operational risk capital allocation.

Course Objectives

After completing this one-week training program, the participant will, at a minimum, be able to

• Understand and discuss the current supervisory guidance on operational risk management and the implications for supervised institutions
• Identify, document, and evaluate inherent risk in a variety of core banking activities
• Assess the interdependency and enterprise-wide impacts of operational risks and the overall risk profi le of financial institutions
• Review and evaluate organizational frameworks, as well as individual internal controls and risk mitigants for managing operational risk
• Assess the quality of enterprise-wide operational risk management, including compliance/legal risks
• Understand key concepts in the quantitative analysis of operational risk for Basel II capital calculation
• Develop an appropriate supervisory strategy and examination plan

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