About the Course

Basel capital and liquidity standards are central to bank supervision, yet many emerging-market banks lack deep technical capability in capital measurement, ICAAP/ILAAP and stress testing.

This ten-day programme covers regulatory capital, risk-weighted assets, capital buffers, LCR/NSFR, ICAAP/ILAAP, stress testing, and Pillar 2/3 requirements, with calculation-based exercises.

Participants leave with a capital adequacy model, a liquidity monitoring framework and a draft ICAAP/ILAAP outline.

Target Participants

Bank risk management and treasury professionals, Regulatory reporting and compliance officers, Finance and capital planning teams, Internal audit staff covering prudential risk, Central bank and banking supervision staff, Board risk committee members and senior management, and development finance institution risk staff.

What You Will Learn

By the end of this course, participants will be able to:

• Interpret the structure and evolution of the Basel III/IV regulatory framework.
• Calculate regulatory capital components and capital adequacy ratios.
• Assess risk-weighted assets under standardized and internal-ratings-based approaches.
• Evaluate operational and market risk capital requirements.
• Analyse capital buffer and leverage ratio requirements.
• Calculate the liquidity coverage ratio and net stable funding ratio.
• Design an Internal Capital Adequacy Assessment Process (ICAAP) framework.
• Develop an Internal Liquidity Adequacy Assessment Process (ILAAP) framework.
• Build stress testing and capital planning scenarios for a bank.
• Prepare Pillar 2 and Pillar 3 supervisory review and disclosure documentation.

Course Duration

• Classroom – 10 Days
• Online – 14 Days

Course Outline

Foundations of Bank Regulation and the Basel Framework

• Purpose of prudential regulation
• Three pillars overview
• Basel committee role
• Regulatory vs economic capital
• Regional implementation status

Evolution from Basel I to Basel III/IV

• Key reforms over time
• Post-crisis rationale
• Basel IV output floor
• National discretion
• Implementation timelines

Regulatory Capital: Components and Quality

• CET1 capital
• AT1 and tier 2 capital
• Regulatory deductions
• Loss-absorbing capacity
• Calculating capital ratios

Risk-Weighted Assets and the Standardized Approach

• Risk weighting principles
• Standardized credit risk approach
• External credit assessments
• Off-balance-sheet exposures
• RWA calculation

Internal Ratings-Based (IRB) Approaches to Credit Risk

• Foundation vs advanced IRB
• PD, LGD and EAD
• Model validation
• Output floor constraints
• Emerging-market IRB challenges

Operational Risk Capital Requirements

• Measurement approaches
• Standardized measurement approach
• Business indicator calculation
• Loss data requirements
• Linking capital to risk practice

Market Risk Capital Requirements

• Standardized market risk approach
• Internal models considerations
• Trading vs banking book
• FRTB overview
• Calculation exercises

Capital Buffers: Conservation, Countercyclical and Systemic Risk

• Conservation buffer
• Countercyclical buffer
• Systemic bank buffers
• Combined buffer requirements
• Buffer usage in stress

Leverage Ratio Requirements and Monitoring

• Leverage ratio calculation
• Exposure measure components
• Leverage buffer for SIBs
• Compliance monitoring
• Disclosure requirements

Liquidity Coverage Ratio (LCR)

• HQLA/outflows
• Classifying liquid assets
• Stress scenario assumptions
• LCR compliance monitoring
• Implementation challenges

Net Stable Funding Ratio (NSFR)

• Available stable funding
• Required stable funding
• Calculation approach
• Managing funding structure
• Balance sheet interaction

Internal Capital Adequacy Assessment Process (ICAAP)

• ICAAP purpose
• Risk identification
• Capital planning
• Board oversight
• Structuring the document

Internal Liquidity Adequacy Assessment Process (ILAAP)

• ILAAP purpose
• Liquidity risk identification
• Contingency funding planning
• Board oversight
• Structuring the document

Stress Testing and Capital Planning

• Scenario design methodology
• Macroeconomic scenarios
• Linking stress tests to capital
• Reverse stress testing
• Communicating results

Pillar 2 Supervisory Review and Pillar 3 Disclosure

• SREP overview
• Pillar 2 add-ons
• Pillar 3 disclosure templates
• Market discipline
• Supervisory dialogue prep

Implementation Roadmap: Basel Compliance in Emerging Market Banks

• Common implementation challenges
• Data/systems readiness
• Sequencing implementation
• Building internal capacity
• Institutional roadmap

Practical Outputs

• Capital adequacy calculation model
• Risk-weighted asset calculation worksheet
• Liquidity coverage ratio and NSFR monitoring tool
• Draft ICAAP outline
• Draft ILAAP outline
• Stress testing scenario template
• Basel implementation roadmap

Training Approach

Technical, calculation-based instruction using worked examples and emerging-market implementation case studies, culminating in an institutional Basel III/IV implementation roadmap.

Organizational Benefits

• Stronger regulatory capital and liquidity compliance
• Improved capital planning and stress-testing capability
• Reduced risk of supervisory sanctions
• Enhanced board understanding of prudential requirements
• Improved ICAAP/ILAAP documentation quality
• Stronger supervisory relationships
• More resilient capital and funding structure

Certification

Participants who successfully complete this course will receive a Certificate of Course Completion from Devimpact Institute, recognizing the knowledge, practical skills and competencies developed through the programme.

Tailor-Made Course

This course can be customized and delivered as an in-house programme to address the specific policies, systems, sector context and capacity-development priorities of an organization. The course duration, modules, case studies and practical exercises may be adjusted following a training needs assessment.