This course examines risk management across the capital markets industry using a non-technical approach. Risk management and regulation continue to evolve in the industry owing to the credit crisis. The risk management process will be explored from the board of directors to portfolio managers and trading desks, right on through to operations. The various risk factors that financial institutions face will be identified. Specifically, market risks faced by participants will be identified and the major risk measurements will be explored. For example, what is the difference between DV01 and duration and how does a trading desk use these metrics versus a mutual fund? What about the bigger picture on liquidity and capital? What impacts has Basel III had on dealers’ inventory and market liquidity? What are the new liquidity requirements at banks and mutual funds? These and other risks such as counterparty credit risk will be explained. Various cases will be discussed throughout, and annual reports and fact sheets will be used to support the main goals of the course.
By the end of the course, participants will be able to:
- Explain the risk management process
- Identify the myriad of risk factors faced by capital market participants
- Determine the various risk measurements used to quantify risk
- Explain the qualitative risk measures used to control risk
- Discuss the effects of changes in regulation on markets including liquidity and systematic risk
- Fundamentals of the Capital Markets/Securities Industry
Program Level: Foundational
Target Audience: Anyone who wants to learn about the foundations of risk management, such as staff from compliance, middle office, legal, IT, operations, or HR, and regulators who work closely with various aspects of capital market risks in financial institutions.
Advance Preparation: None
Computers and Financial Calculators: Calculator
Recommended CPE Credits: 2.6
Instructor: Rob McDonough
Duration: 2.25 Hours