Risks and failures of banks (Live)

Bank failures can be valuable lessons. They are a reminder of the importance of strong risk management, prudent regulation, transparency and disclosure of information, and the need to learn from past crises in order to prevent future ones.

Interested? Email us at [email protected]

Learning Objectives

This course offers an in-depth examination of banking risks and some case studies of known banks' failures. It covers risk management practices, regulatory frameworks from Basel I to Basel III, and analysis of major bank collapses to gain essential lessons in financial stability and risk mitigation.

Understand and analyze the key types of risks faced by banks, including credit risk, market risk, and liquidity risk, alongside the methods and frameworks used in risk management from Basel I to Basel III.
Identify and evaluate the regulatory requirements related to credit risk, market risk, and liquidity risk, including capital requirements, liquidity ratios (LCR, NSFR), IRRBB, the bank resolution framework, and TLAC.
Analyze case studies of recent bank failures, such as Lehman Brothers, WaMu, Silvergate Capital, SVB, Signature Bank, and Credit Suisse, to derive lessons on the impact of risk exposure, regulatory shortcomings, and the importance of risk management practices.

Lenght

1 day
Form

online live
Difficulty

basic/advanced

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Live course with a lecturer

This is Bearning's live interactive course with a lecturer. You can attend as follows:

📅❌ If no specific date is listed for the course, then we currently only offer this course as an inhouse course for institutions or groups of participants (3+ ). Contact us by email for more information. We are always happy to tailor this course to your requirements. We can deliver it online or in person.
📅✅ If the course is listed for a specific date, you can sign up for it by registering and paying the fee. We will confirm your registration for the course and send you a link to connect (usually via Zoom or MS Teams) and a PDF of the presentation prior to the course. You can also register for the course by email, or you can contact us for further information. Course content and further details can be found on the course page.

Who should attend

Target group

Risk Management Professionals: Risk managers and data analysts aiming to enhance their knowledge of risk policies and regulatory compliance. Those involved in market risk, credit risk, and liquidity risk management.
ALM/Treasury Professionals: Treasury managers and officers looking to deepen their understanding of the role of Treasury in banking. Those involved in pricing strategies, interest rate decisions, and funds transfer pricing.
Banking Professionals: Financial analysts, managers, and executives involved in bank management, controlling, strategy, and risk operations.
Cross-Functional Bank Experts: Bank professionals from various departments (business units retail and corporate, financial advisors, middle-office, back-office, legal, etc.).

Course Description

Understand better the Banks' Risks

This course delves into the complexities of bank risk management, exploring various types of risks such as credit, market, and liquidity risks, alongside the strategies banks use to mitigate them. It provides an overview of related banking regulations, tracing the evolution from Basel I to Basel III, and examines the critical regulatory requirements that banks must navigate. Through case studies of known bank failures, including Lehman Brothers, SVB and Credit Suisse, the course offers practical insights into the consequences of inadequate risk management and the lessons that can be learned to prevent future collapses.

Content

High-level overview of bank's risk management:
- Credit risk (default, migration, credit-spread volatility),
- Market risk (interest rate risk comprising level risk, yield curve risk and basis risk, FX risk, option risk, and risk of market liquidity,
- Liquidity risk and own spread
High-level overview of banking regulation: from Basel I to Basel III and its adjustments
Key regulatory requirements related to credit risk, market risk and liquidity risk (capital requirements and ICAAP, liquidity ratios LCR and NSFR, IRRBB, bank resolution framework and TLAC)
Case studies & showcases of recent bank failures and lessons to be learned:
- Lehman Brothers (2008) - too high exposure to subprime loan risk, MBS and related derivatives
- WaMu - Washington Mutual (2008) - high exposure to subprime mortgage lending and subsequent liquidity problems
- Silvergate Capital (2023) - too high interest rate risk in the banking book, subsequent run and liquidity problems
- SVB - Silicon Valley Bank (2023) - too high interest rate risk in the banking book, subsequent run and liquidity problems
- Signature Bank (2023) shuttered by regulators after run on the bank caused by external environment and depositors' concerns, and subsequent liquidity problems
- Credit Suisse (2023) involved in multiple scandals, incl. mismanagement of funds, reported huge EoY loss and rattled investors. All of this caused depositor runs and the subsequent bank collapse.

Instructor

CEO, Bearning Martin Macko

Martin started his career in banking in 1994 as an MM&FX Treasury trader. Later he was appointed Treasury Director and Chairman of ALCO at a subsidiary of an international banking group. In 2007, Martin founded a consulting company. Later, Bearning expanded its activities to include professional banking education in the areas of ALM & Treasury, financial markets, risk management, fintech and digitalization. Martin holds several degrees and qualifications: Ing. (equivalent to M.Sc.) from the Slovak Technical University, ACI Dipl. (ACI Dipl.) from the Financial Markets Association, Financial Modeling & Valuation Analyst (FMVA)® and Certified Banking & Credit Analyst (CBCA)™ and Capital Markets & Securities Analyst (CMSA)® from the Corporate Finance Institute.

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Lenght

Form

Difficulty

Live course with a lecturer