UNDERSTANDING REGULATORY CAPITAL

Service Description

Course Objectives: • Develop a comprehensive understanding of regulatory capital and its role in financial stability. • Gain insights into the different types of regulatory capital and their significance. • Learn how to determine regulatory capital under Basel Accord Standards, considering risk weights and asset categories. • Explore the application of regulatory capital in risk management processes such as liquidity ratios, stress testing Day 1: Understanding Regulatory Capital Basics • Definition and Significance: Unveiling the role of regulatory capital in financial stability. • Types of Regulatory Capital: Exploring Tier 1, Tier 2, and Common Equity Tier 1. • Capital Adequacy Ratios: Basel III's capital adequacy framework. • Regulatory Capital's Purpose: Enhancing resilience and absorbing losses. Day 2: Regulatory Capital Determination • Basel Accord Standards: Linking regulatory capital to Basel's guidelines. • Risk Weighted Assets (RWA): Unpacking the concept and its role in regulatory capital computation. • Risk Categories: Credit, market, operational, and counterparty risks' impact on RWA. • Capital Buffers: Understanding capital conservation, countercyclical, and systemic buffers. Day 3: Calculating Regulatory Capital • Application of Risk Weights: Assigning risk weights to assets based on risk levels. • Risk Weight %: Determining appropriate rates for different asset types. • Common Equity Tier 1 (CET1) Capital: Defining and calculating CET1 capital. • Tier 2 and Total Capital: Comprehending Tier 2 and overall regulatory capital. Day 4: Regulatory Capital in Risk Management • Liquidity Ratios: Exploring liquidity coverage ratio (LCR) and net stable funding ratio (NSFR). • ICAAP and ILAAP: Understanding Internal Capital Adequacy Assessment Process and Internal Liquidity Adequacy Assessment Process. • RRP and Stress Testing: Delving into Recovery and Resolution Planning and stress testing's link to regulatory capital. • Regulator Approval and Supervision: Navigating the process and implications of regulatory review. Day 5: Regulatory Capital Framework and Supervision • CRD IV: Analysing Capital Requirements Directive IV and its significance. • SREP: Understanding Supervisory Review and Evaluation Process. • The Three Pillars: Exploring the three-pillar approach to banking supervision. • Future Trends: Discussing potential changes in regulatory capital frameworks. • Interactive Workshop: Applying concepts learned to real-world case studies.

Contact Details

• Ability House, 121 Brooker Road, Waltham Abbey, UK

  +442081453355

  info@implementbaselaccord.com