This course provides an understanding of how stress-testing initiatives can be carried out in financial institutions, be it for regulatory or for management purposes. It is more and more critical for banks to master the type of risks that rarely occur, but each time to devastating effects for the unprepared. The 2007 crisis has proven, once again, that the exercise is less easy than people care to admit, and more critical to survival and success than regulators used to think. This course explores the techniques to design and test relevant scenarios. There are no formal prerequisites.

At the end of the course delegates will be able to:

• Understand practical insights of what it takes for a bank to set up a sensible and compliant framework for managing extreme risks
• Analyse factors of recent crises and why these could happen again
  Understand the interactions between risk takers, information processors and risk managers
• Come to a representation of what it takes to manage day-to-day to eventuality of extreme scenarios

• Why extreme risk management and regulation thereof
• Risk regulation as viewed in Basel III
• Stress-testing within Basel III
• Stress-testing for market and credit risk
• Stress-testing for operational risk
• Stress-testing scenarios
• Stress-testing governance and process