Effective Board Oversight of ICAAP and ILAAP

Date: On a date of your choice
Location: Delivered as an interactive briefing
Event Code: EBOII

Course Details

If you are on the Board of a regulated bank or investment firm captured by CRD4 then you are responsible for reviewing and challenging the adequacy of risk management and financial resources.

This can be a daunting prospect whatever professional background you have. This is a unique opportunity to hear one of the architects of the pillar 2 framework who will walk you through the key components of ICAAP and ILAAP to de-mystify terminology and the calculations as well as giving examples of good and bad practice and how to handle discussions with the regulator.

The Internal Capital Adequacy Assessment Process (ICAAP) and Internal liquidity adequacy assessment process (ILAAP) are key components of this and it is important that Board members can provide robust levels of challenge.

For a Chair of the Risk Committee, this could include being interviewed by the regulator as part of their Supervisory Review and Evaluation Process (SREP).

Who should attend:

This briefing is intended for Board members of banks and investment firms captured by CRD4. It is also ideal for those newly appointed in a Senior Management Function or as part of induction or succession planning.

Agenda:

1. Overview of Basel capital and liquidity frameworks

  • Background to the Basel framework
  • Components of pillar 1, pillar 2 and capital buffers

2. Governance

  • Challenge of the ICAAP and use test
  • How ICAAP fits into the rest of the risk management framework

3. Components of ICAAP document

  • Setting meaningful risk appetite statements
  • Assessing the adequacy of the capital calculations through pillar 2a
  • Stress testing and scenario analysis
  • Capital buffers

4. The regulators’ expectations through supervisory review and evaluation (SREP)

  • Good and bad practice in the regulators eyes
  • What to expect in through the SREP
  • Total Capital Requirements (TCR) and transparency

5. ILAAP

  • Overall Liquidity Adequacy Rule (OLAR), LCR and NSFR
  • Pillar 2 - Key liquidity risk drivers
  • Liquidity stress testing
  • Supervisory review L-SREP

6. Future developments

  •  New standardised approaches and Basel IV

Key Benefits

  • Learn about best practice for setting risk appetite and what the pitfalls can be       
  • Understand the building blocks of capital requirements such as pillar 1, pillar 2a and pillar 2b
  • Feel equipped to provide robust challenge on the assumptions underlying ICAAP and ILAAP
  • Know what makes a good ICAAP and ILAAP in the eyes of the PRA
  • Understand how the PRA approach their Supervisory Review and Evaluation Process (SREP)
  • Understand how ICAAP and ILAAP is linked to business strategy and how it is used to drive business decisions

 

 

 

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