COUNTERPARTY RISK ANALYSIS OF EMERGING MARKET BANKS
by Istvan LengyelLanguages: English, Hungarian
Price (from): €1 / day
About the trainer:
Training at the courses on Bank analysis on intermediate and master level (in 10 years, more than 1000 people attended)
Managing the operations of the Banking Association for Central and Eastern Europe, including running the Budapest Office, organization of professional events (seminars, conferences, training courses).
Supervision of BACEE’s analytical work as the association’s Chief Analyst
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COUNTERPARTY RISK ANALYSIS OF EMERGING MARKET BANKS by Istvan Lengyel
About the training
#RISK ANALYSIS #BANKS #EMERGING MARKET #COUNTERPARTY RISK
After numerous bank failures, including the most recent ones during the global economic and financial crisis of 20077-2009 and the Eurozone crises, banks face the difficult task of assessing and measuring the counterparty credit risk represented by their peers.
The training course offers the classical dual approach of measuring the internal strength of banks combined with the probability of external support. Besides analysis of financial data, special attention is paid to the “soft” elements of analysis, not reflected in the financial statements: quality of banking supervision and banking regulation,ownership, quality of management, the bank’s franchise, importance in the home country’s financial system, corporate governance, quality of disclosure of information/openness. We also assess the reliability of information available ont he targets bank.
Within the financial analysis, we focus on IFRS-based data, using the dynamic approach (time series analysis), peer group analysis, SWOT analysis, discovering the bank’s relative strengths and weaknesses compared to main competitors.
Capital strength and liquidity will be analyzed in the context of the revised Basel III requirements.
In addition, the bank’s overall risk profile will be created, including credit, FX, maturity, liquidity, strategic and market risk.
Each separate aspect will be measured and reflected in a credit scoring assigned to the analyzed bank.
The training ends with a Credit Committee meeting when the participants assign (or refuse) on a well-argumented basis different types of credit lines to the counterparty bank.
Learning outcomes
Participants get a detailed analysis on the value of different information sources and on how to use them
Participants get a detailed analysis of the value of different information sources and on how to use them
Assessment of “soft” information
In the case of EM banks, non-financial indicators represent up to 60-70 percent of credit risk scoring. During the training, with the help of case studies, participants will learn how to identify and measure “soft” risks; With the help of “historical” examples, the trainer will show how to avoid analytical failures of the past and learn from others’ mistakes. Be aware of “this time is different” statements!
Overview of main analytical tools used in counterparty risk analysis
Participants will use methods of dynamic (time series) analysis, peer group comparisons, risk-based assessment of financial data, learn how to discover internal controversies in FS
Ability of preparing own credit line proposals for the Credit Committee
Based on the knowledge obtained during the course, participants will be able to prepare their own independent assessment of counterparty banks and limit proposals for the CC of their banks
Program
Lessons learned during recent financial/banking crises
Main reasons for bank failures
Banking regulation, Basel III, CRD IV
Assessment of information sources available for bank analysts
Overview of “soft” elements of bank analysis
Understanding IFRS-based Financial statements
Assessment of a bank’s own financial strength and expected external support
Overview of main financial risks faced by the bank on the basis of available information
Non-financial risks
Using scoring techniques in bank analysis
Credit Committee meeting
Main benefits
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