Key Benefits
- Understand capital adequacy frameworks, including Basel evolution, three pillar structure, and key regulatory requirements shaping bank capital decisions
- Apply internal capital adequacy assessment processes, risk identification, and capital allocation techniques to determine sufficient capital levels
- Evaluate regulatory changes, liquidity, and risk impacts on bank strategy and business models to improve compliance and strategic planning
Do You Need to Attend This Course?
This Bank Capital Adequacy Under Basel III and CRD IV & V Masterclass is a ‘must know’ for:
Senior and top managers seeking to gain a better understanding of their responsibilities in this area
Credit, Compliance & Risk Officers who are charged with overseeing and managing compliance with Basel III and its development
Department Heads, Team Leaders and Supervisors
Client Relationship Teams are looking to understand the impact on their activities
Internal Audit staff that are responsible for reviewing the processes
Delegates seeking a better understanding of this area and how it impacts banks generally
Anyone involved or with an interest in Basel III onwards, seeking either a refresher or a new skill
Technical Content
Day One Session 1: The Evolution of Financial Regulation
This Basel III training session explores the evolution of global financial regulation, examining key lessons, technical challenges, and the impact of Basel 3.1 on banks, regulators, and market stability:
The imminent introduction of Basel 3.1
The failure of SVB & Credit Suisse and the lessons learned
The journey from Basel I to Basel III
Improving risk and asset management
Aligning regulation and economic realities
The technical challenges from a bank/regulator’s point of view
How much capital is sufficient?
The 3-pillar regulatory structure
GSIBs & Domestic SIBS & SIFIs
IFRS9
Session 2: Determining How Much Capital: Internal Capital Adequacy Assessment Process (ICAAP)
Basel 3 training provides a practical guide to capital adequacy, focusing on ICAAP, risk identification, and the regulatory framework for determining and reviewing capital requirements.
The different types of Capital
Going Concern and Gone Concern
Determining capital using the ICAAP
Pillar One & Pillar Two risks
Identifying risks and allocating risk capital
The difference between Pillar 2a and Pillar 2b
Challenge and independent review
Capital buffers: optional and mandatory
Arriving at the agreed CA
Practical examples/Case study
Session 3: Basel in More Depth
Fixing what went wrong
An overview of the new requirements
CET 1 & CET 2 capital
CoCo’s – additional capital
Capital buffers: Capital conservation buffer
Countercyclical buffer
CAR, RWAs and the leverage ratio
Basel training covers counterparty credit risk
Banks own buffers
Total Loss Absorbing Capacity (TLAC)
Minimum Requirements for Own Funds and Eligible Liabilities (MREL)
Interaction of TLAC & MREL with other requirements/ratios
Proposed capital floors and the interaction with CAR
Liquidity risk – much greater focus
Practical examples/Case study
Session 4: How Does Basel Impact Banks?
Stronger balance sheet
Much better liquidity
More conservative risk management
New imperatives: De-risking
Moving towards fee income
Pressure on margins
Pressure on costs – particularly in compliance
Effective strategic capital management is now essential
Practical examples/Case study
Day Two Session 5: Basel & Liquidity
Liquidity Buffers
Liquidity Coverage Ratio
Net Stable Funding Ratio
Required Stable Funding
The relationship between capital and liquidity
Liquidity stress testing
Liquidity management in practice
Practical examples/Case study
Session 6: Basel & Credit Risk
Basel 3 courses on credit risk provide a detailed exploration of regulatory approaches, key risk parameters, and practical applications to strengthen risk management and capital assessment:
Standardised, Foundation IRB, Advanced IRB
Understanding PD, EAD & LGD
Revised standardised approach with its phased-in output floor
Overview of standardised approach details
Return on Risk-Adjusted Capital (RORAC) – a practical example
Practical examples/Case study
Session 7: Leverage
Leverage ratio based on CET 1 and ignoring the RWA process
CAR versus leverage ratio
How does this impact banks
ALM management
Practical examples/Case study
Session 8: Market Risk
Definition
VAR models
New formulae
Internal models - high level
Practical examples/Case study
Session 9: Operational Risk
Basel III training courses on operational risk provide an in-depth understanding of the core concepts, calculation methods, and practical tools necessary to manage risks arising from people, processes, systems, and external events:
Definition
Losses from inadequate or failed internal processes, people and systems or from external events
Three current methods of calculation
Heat maps: likelihood/impact
Revised standardised calculation/process
Practical examples/Case study
Session 10: Moving Forward: What Changes Are Likely?
ESG: a potential game changer?
The move towards simplicity
Focus on Pillar 2 risks
G SIBS & D'SIBS
Less reliance on modelling
More disclosure
More bail-in measures
Continued stress test and scenario modelling conclude Basel training ahead of rounding off
Session 11: Wrap-Up and Open Forum
Training Objectives
Basel III training at Redcliffe provides a clear understanding of the drivers behind regulatory change, the evolving capital adequacy framework, and the practical implications for banks, risk management, and business models:
Training examines the rationale behind continued regulatory tightening on banking institutions and explores the anticipated impact on future business models.
Sessions investigate the impact of ESG.
We consider purpose, principles, evolution and application of the Basel Capital Adequacy regulations and what is required in terms of: Regulatory capital
Risk-weighted assets
Capital Adequacy Ratios
Training evaluates the impact of recent bank failures – especially Credit Suisse.
This Basel III course investigates the impact of the completion of Basel III - so called "Basel 3.1" - where the simplification of the three Pillar One Risk modelling processes has been implemented in many parts of Europe but has been delayed/deferred in both the UK & USA until on or after 1.1.2027
Training Course Summary
With the benefit of hindsight, it’s clear that global regulation struggled to withstand the pressures of the 2008–2009 credit crisis. In response, Basel III and its iterations were introduced to address the most significant weaknesses in the banking system. Ensuring adequate loss-absorbing capital, together with effective liquidity and risk management. This Basel III course at Redcliffe Training explores how these measures have been designed to create a more resilient and stable financial framework, reducing the likelihood of future systemic failures.
The collapses of Credit Suisse and SVB were, for some, surprising. But these failures are judged to have been idiosyncratic and not a failure of regulation per se.
Basel III has given regulators “superpowers”, and for the past few years, banks have been closely supervised and, in some regards, micro-managed. Basel III is being adopted almost universally as a benchmark of excellence and is probably a prerequisite for doing business with global banking partners.
This is critical for those nations seeking or needing to attract inward capital investment. Without global partners, raising the funds required domestically or enjoying access to trade finance and international wealth management is very challenging. Basel training will help.
We are told there will be no Basel IV (but this could change post Credit Suisse).
Your trainer
Course Trainer · 40 yrs experience
- Banking Training Courses
At Redcliffe Training, our Basel III course is led by a specialist who has built a highly successful career in risk management, beginning with a fast-track progression at Lloyds Bank, where he achieved senior management responsibilities at an early age. He was later headhunted to join a merchant bank as a main board director, leading the risk management function. He brings over 40 years of hands-on experience in managing risk across the UK banking and financial services sector. A freelance risk management training consultant since retiring, our expert is currently an external Master Trainer at both HSBC and Bank of China, where he has delivered major projects on a wide range of topics. Our Basel 3 training specialist helped HSBC design their global flagship Risk Management Programme for senior middle managers, delivering this globally for the past 5 years. He has also created and delivered training to many clients, from global giants to small firms and partnerships. He is an accomplished global trainer and has delivered extensive programmes in the UK, USA, South America, Europe, Africa, Asia and the Middle East. This trainer is a highly adaptive, hands-on, highly sought-after facilitator who always receives excellent feedback from participants attending Basel 3 courses and capital adequacy rules. He is comfortable training at any level of seniority and experience, from “black belts” to novices. In addition to his core specialism in risk management, this trainer's expertise spans Trade Finance, Regulatory Compliance, FCC & AML, as well as all aspects of Corporate, Private, and Retail Banking. Alongside his extensive experience in Basel, he is also a highly accomplished soft skills instructor. One such accomplishment is having completed numerous “train the trainer” programmes. A highly comprehensive background enables him to deliver practical insight and technical depth across a wide range of financial subjects, with particular emphasis on Basel 3 capital adequacy.
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