Applied Risk Management

Financial risk management in an ERM framework

Course overview

This course is aimed at those with some experience in or of treasury who wish to gain a deeper understanding of financial risk management. It looks at how decisions on financial risk management should be taken, consistent with enterprise-wide and other risk management programmes elsewhere in the organisation. Placing risk identification in a practical context, it identifies methodologies for risk quantification and discusses how an appropriate risk management response might be determined. All this is set within the context of a case study organisation.

A working knowledge of the principles of risk management is assumed for this course, therefore participants may also be interested in the Fundamentals of Risk Management training course first.

Programme

Risk identification and assessment in practice

• Applying the framework for risk management
• Identifying treasury risks within a realistic situation
• Risk management and business strategy; who are we hedging for and what are we hedging?

Risk evaluation

• Sensitivity analysis
• Scenario analysis
• Developing the use of Value at Risk (VaR)
• Applying VaR to a realistic situation
• Advantages/shortcomings of VaR

Risk planning

• Policy development and benchmark setting
• Deciding whether or not to hedge
• Deciding what form any hedging should take
• Trading off different benefits from different hedging action
• Criteria for deciding which instruments to use
• How/when to implement the hedge

Risk reporting

• Is policy being followed?
• Is policy having the right effect?
• Typical information flows

What you will gain

• Understanding of how to quantify risk exposure
• A detailed overview of how to determine risk management action and develop policy consistent with an ERM framework
• Practical knowledge of how to apply risk management theory

Who will benefit?

• Treasury professionals involved with designing, implementing or reviewing treasury risk management practice, particularly in the context of Enterprise Risk Management (ERM)
• Finance and risk professionals who need to understand why and how treasury risk management decisions are taken, and how they fit within an overall risk management framework
• Audit and compliance professionals who audit the treasury function or who have risk management or corporate governance responsibility
• Consultants and bankers who need to understand how organisations can use ERM frameworks to manage financial risk

Trainer

ACT risk management trainers are:

• Ian Jakeways FCT. Mike Northeast FCT, MA, MBA. James Lockyer FCT.