Risk-Focused Supervision and Risk Assessment SeminarFederal Reserve System Courses

Type of Participant Targeted

This program is for all examiners with more than three years of relevant field experience who have participated in safety and soundness examinations of banks. The seminar utilizes a single case study throughout the program to demonstrate the risk-focused approach to assessing and examining a financial institution's credit, market, liquidity, and operational activities. In addition, the course highlights the core elements of the examination process, such as planning, implementation, and follow-up.

Prerequisites

None

Course Overview

This course is designed to enhance a participant's analytical and decision-making skills through lectures and group work that simulates actual examination activities. Lectures will cover four primary risk categories: credit, operations, market, and liquidity. Each risk category lecture will focus on the processes and techniques for developing a risk assessment in preparation for creating an examination scope and plan. During the group case study work, participants will use critical thinking skills to review institutional data, financial institution documents, and previous examination work papers and summary findings to identify and prioritize areas of risk and evaluate risk management processes. Participants will develop a written risk assessment that identifies strengths and weaknesses for the functional areas and assess the overall risk of the institution. As part of the functional review, participants will identify examination techniques to employ as part of the on-site examination.

Course Objectives

Upon completion of this 4-1/2 day seminar, the participant will

• Be familiar with the skills and responsibilities regarding risk-focused supervision principles
• Understand processes for identifying and measuring inherent risk for critical risk areas
• Be capable of analyzing appropriate information from bankers to develop a final institutional risk profile and identify material findings of supervisory concern
• Be familiar with examination techniques to review high-risk areas identified through the risk-assessment process.

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