The financial ecosystem comprising banks, financial markets, central banks and regulators has deepened in size, sophistication and complexity across countries over the last few decades. However, they have also been the subject of abuse and manipulation thanks to the rapid proliferation of complex financial products and a plethora of risk transfer instruments such as CDOs, CDS, etc. That, in turn, resulted in a ‘risk contagion’, which spiraled out of control and eventually resulted in the global financial crisis of 2008, a calamitous event that has forever significantly altered the banking and financial markets landscape worldwide.
What are the lessons learnt from the 2008 financial crisis? What is the likelihood that the world might witness a similar crisis in the future? This Professional Certificate Program, a compendium of five courses plus a ‘certification course’, will help answer those questions through an elucidation of the theories, concepts and practices that make up the complex and dynamic world of banking and financial markets and the plethora of risks embedded in that domain. How are those risks identified using tools such as ‘value at risk’ (VaR), ‘stress testing’, etc.? How are those risks minimized using hedging instruments such as futures, options, swaps, etc.? Can the stability of financial systems be ensured using ‘liquidity measures’ such as ‘cash reserves’ and ‘solvency measures’ such as ‘capital adequacy’?
This Program will also critically examine why those measures could not predict and contain the financial crisis of 2008 and to what extent can more recent global regulatory initiatives such as Basel-III (and Basel-IV?) guidelines ensure the future stability of banks and financial markets worldwide. Can those measures at all ‘ring-fence’ financial systems worldwide from a recurrence of the global financial meltdown, as witnessed in 2008!
This Professional Certificate Program is offered by IIM-Bangalore, one of the leading business schools in Asia, and taught by Prof. P C Narayan who has nearly four decades of experience and is well regarded in this field of study. It uses an array of spreadsheets and other interactive tools to help learners fully grasp and master the concepts, without getting too deeply entangled in the mathematical complexities of risk management.
This program is particularly well suited for risk management professionals who wish to up-skill themselves as well as those preparing for certification exams such as FRM, PRMIA, etc. who wish to understand risk management in Banking and Financial Markets in great detail.
Courses under this program: Course 1: Banking & Financial Intermediation: Concepts, Risks, Capital & Regulation Learn about banking and financial intermediation as well as credit, operational, off-balance sheet, liquidity & solvency risks and Basel guidelines.
Course 2: Debt & Money Markets: Concepts, Instruments, Risks and Derivatives Learn about money markets (short-term financial markets) and debt markets, the associated risks and how they are managed/mitigated.
Course 3: Equity Stock Markets: Concepts, Instruments, Risks and Derivatives Learn the fascinating equity stock markets, the embedded risks and how are these risks are identified, managed and hedged using derivative instruments.
Course 4: Foreign Exchange Markets: Concepts, Instruments, Risks and Derivatives Learn about the fascinating world of Foreign Exchange Markets, the theories and practices, the embedded risks and the associated derivatives.
Course 5: Special Topics in Risk Management of Banking and Financial Markets Learn about structured financial products (ABS, CDS, CDO) as well as Value-at-Risk (VaR), stress testing and related risk management techniques.
Course 6: Risk Management in Banking and Financial Markets Professional Certificate Exam Complete this certification exam to earn your ‘Professional Certificate’ program in Risk Management in Banking and Financial Markets from IIMBx.
In this course, part of the Professional Certificate program ‘Risk Management in Banking and Financial Markets’, we will understand the underlying theories as well as the structure and functioning of equity stock markets, how to identify, assess and manage the heightened level of risks in equity stock markets and the role of derivative instruments in hedging those risks.
Equity stock markets are perhaps the most vibrant and ‘visible’ of all financial markets around the world by virtue of the broad spectrum of participants and the volume and value of transactions traded in these markets. Given that dominant presence, assessing and managing risks in equity stock markets have also become increasingly sophisticated over the years, thanks to several theories such as portfolio theory, CAPM, sharp ratio, etc. that have evolved and matured over the years. This course will address in great detail those theories and how risks are managed/mitigated in equity stock markets around the world.
This course will also address the structure and functioning of private equity markets and also provide an overview of a related topic, venture capital financing.
In order to earn this Professional Certificate and stand out in your field, you need to take the ‘Risk Management in Banking and Financial Markets Professional Certificate Exam’ from IIMBx.
The Exam will be timed for three hours and will comprise questions based on topics covered in all the five courses. To earn your Professional Certificate, you must receive a minimum score as per the course’s grading policy for the Exam.
This course, part of the Professional Certificate Program ‘Risk Management in Banking and Financial Markets’, will help you understand the theories and the macroeconomic context governing banking and financial intermediation as well as measures to manage credit risk, off-balance sheet risk, operational risk, liquidity risk and solvency risk, including Basel guidelines on capital adequacy.
Banks and other financial intermediaries make up a large part of the ‘ecosystem’ that channelizes money from those who have it (i.e. savers/investors) to those who need it (i.e. borrowers). Central Banks in most countries also use that ecosystem to effectively manage money supply (liquidity) and to safeguard the stability of the financial system.
This course will look at the products and services offered by banks and financial intermediaries and the significant complexities and risks they encounter in conducting their business in a globally interconnected world.
It will address in detail the embedded risks in banking and financial intermediation such as credit risk, off-balance sheet risk, operational risk, liquidity risk, solvency risk, etc., and how these risks are identified, measured and managed, using several risk mitigation techniques and regulatory mechanisms.
In this course, part of the Professional Certificate program ‘Risk Management in Banking and Financial Markets’, we will examine the structure and functioning of money markets (short-term financial markets) as well as debt markets, the manifestation and impact of interest rate risks in those markets and how are they managed/mitigated.
The first part of this course will examine in detail money markets (short-term financial markets) such as call money markets, T-bills markets, repo markets, etc. that make up the ecosystem to effectively manage money supply (liquidity) and ensure stability of the financial system in the short-term.
The second part of this course will look at debt markets, the underlying theories such as time value of money, bond pricing and bond valuation, as well as the structure and functioning of debt markets including corporate bond market, government securities (T- bond) market and mortgages market.
Interest rate and inflation together are the most significant macro-economic variables that impact global financial markets, particularly debt markets, even more so given the free flow of capital across countries and the consequent emergence of globally interconnected financial systems. As a result, managing interest rate risks and its consequent impact on the riskiness and volatility of instruments traded in the money and debt markets have become exponentially more complex.
This course will address the tools and techniques to manage the heightened level of interest rate risks. It will also look at derivative products such as futures, swaps and options and their role in not only helping institutions to hedge against those risks but also to speculate and make additional profits where possible.
In this course, part of the Professional Certificate program ‘Risk Management in Banking and Financial Markets’, we will learn the theory and structure of foreign exchange markets, the instruments that are traded and the trading and settlement mechanisms. We will also learn how to identify, assess and manage foreign exchange risk as well as the role of derivative instruments in hedging these risks.
Thanks to the economic liberalization in several countries over the last few decades, the world has witnessed an exponential increase in the free flow of capital across countries, even more so in emerging economies. This has resulted in a globally interconnected ecosystem of banks and financial markets engaged in foreign exchange transactions that are continuously growing in volume, sophistication and complexity. That, in turn, has attracted a plethora of participants whose explicit intention is to either profit from or hedge against the heightened level of risks in the foreign exchange markets.
This course will unravel those complexities and help you gain a comprehensive understanding of foreign exchange markets: the underlying theories, the instruments traded, the associated risks such as transaction exposure, operating exposure, translation exposure, etc. and how those risks are addressed/redressed using several techniques including using derivative instruments such as currency options, currency futures and currency swaps.
In this advanced course, part of the Professional Certificate program ‘Risk Management in Banking and Financial Markets’, we will look at structured financial products such as Asset Backed Securities (ABS), Residential Mortgage Backed Securities (RMBS), Credit Default Swaps (CDS), Collateralized Debt Obligations (CDO) and their role in transferring/diversifying the risks to several entities in the financial markets.
We will also examine the unintended consequences and outcome of those risk transfer instruments that accentuated the systemic risk and eventually lead to the 2008 global financial meltdown.
In addition, we will look at special topics in risk management such as Value at Risk (VaR) and stress testing, as well as recent trends in regulation including the Basel-III guidelines on capital adequacy that have been implemented in several countries to manage risk in a proactive and consistent manner.
More importantly, we will examine how far have those regulatory measures and guidelines been able to achieve the well-intentioned goal of safeguarding the stability of financial systems across countries and whether they would, in the future, be able to anticipate and avert cascading adverse outcomes as witnessed in the 2008 global financial crisis.