Course Outline

Seat Time: 2.25hrs 

This course will introduce the learner to the Basel Committee on Banking Supervision's Basel II and Basel III Accords. The course will discuss the ways in which the accords affect the bank's credit, operational, and market risk and how bank capital is formulated. After completing this program, the learner will understand:

• How to distinguish between credit, operational, and market risk.
• How to calculate credit ratings.
• Pillars I, II, and III of Basel II.

Course Topics

T1. The Basel Accords: This topic will teach the learner about the history of the Basel Committee on Banking Supervision so that s/he can describe the objectives of the Committee and the accords issued by the Committee to address capital banking issues.

T2. Pillar I of Basel II: This topic will provide the learner with an introduction to Pillar I of Basel II, which has accords that deal with the financial institution's maintenance of minimum capital requirements to protect itself from risk, so that s/he can describe the three main types of bank capital and the formula used.

T3. Basel II and Credit Risk: This topic will define credit risk and will provide the learner with two different approaches that can be used to calculate Risk Weighted Assets (RWAs).

T4. Basel II and Operational Risk: This topic will define operational risk and will provide the learner with four different approaches that can be used to calculate operational risk capital charges.

T5. Basel II and Market Risk: This topic will define market risk and will provide the learner with explanations of the five different risk factors that must be calculated to accurately measure the market risk capital charge.

T6. Pillar II: This topic will teach the learner about the nature of Pillar II of Basel II so that the learner can describe the risks indicated by Pillar II and the responsibilities with which Pillar II tasks financial institution supervisors and managers.

T7. Pillar III: This topic will teach the learner about the purpose of Pillar III of Basel II and the disclosure requirements that Pillar III establishes so that the learner can describe the components of the financial institution's disclosures.

T8. Implementation and Penalties: This topic will teach the learner about the ways in which Basel II is implemented and the penalties that are imposed on financial institutions that do not implement each phase of Basel II so that the learner can describe the phases of implementing the pillars of Basel II.

T9. Basel III: This topic will teach the learner about the Basel Committee's Basel III accords so that the learner understands the purpose of the implementation of Basel III and the effect that it will have on the financial institution's capital.