Session 1:

An introduction to risk management

• The risk-management framework

• Financial risk – an overview and the way risk management connects with the capital markets and banking

• The generic characteristics of risk

Session 2:

Current trends in risk and risk management

Specific risk and market risk defined

Subjective risk - cultural, personality and attitude

The components of risk:

• country-sovereign-political

• currency-exchange rate

• commodity

• interest rate

• commercial-credit

• project

Session 3:

How it all can go wrong

• Enron

• AIB

• LTCM

• Orange County

• L.B. of Hammersmith

• Barings Bank

• Metallgesellschaft

Session 4:

Managing and Measuring risk:

• operational

• accounting

• model

• tax

• legal

• political

• liquidity

• The risk glossary

Session 5:

Risk measurement tools:

• Value at risk

• Simulation – historical and Monte Carlo

• Risk parameters – the Greeks

• Variance co-variance and correlation

• Yield curve modelling

• Staff in organisations and their attitudes towards risk – risk and reward.

Session 6:

Derivatives and hedging

We shall be looking at when and where it is appropriate to use Derivatives and Hedging.

When it is appropriate to use derivatives:

• Swaps

• Options

• Futures

Session 7:

Standards of risk management; organisational responsibilities

• Does the Board truly understand risk? The 13 questions

• Risk standards for investment managers

• The balance between risk and reward

Course Close