Financial Stability Institute

and the

Committee of Banking Supervisors of West and Central Africa

Risk-focused Supervision, Problem Bank Resolution, and Corporate Governance

Khartoum, Sudan, 8 - 12 April 2002

WORKSHOP PROGRAMME

 1. Risk-focused Supervision: How is Risk Defined?

Mr Jean-Philippe Svoronos, Member of the Secretariat, Basel Committee on Banking  Supervision, Switzerland

·        What is risk?

·        Types of risk and their definition

·        Risk factors to consider when assessing risk

·        Determining the level and direction of various risks

2. What is Risk-focused Supervision?

 Mr Jean-Philippe Svoronos, Member of the Secretariat, Basel Committee on Banking  Supervision, Switzerland

·        Objectives of the supervisory process

·        Evolution of examinations and inspections / comparison with traditional examination  processes

·        Benefits of risk-focused supervision

·        Risk-focused supervision: a cross country comparison

3. Bank Rating Systems and Early Warning Systems

 Mr Jason George, Senior Financial Sector Specialist, Financial Stability   Institute, Switzerland

·        Types of supervisory rating systems

·        Types of early warning systems

·        Country comparison

4. Off-site Supervision and Other Risk-focused Supervision Issues

 Mr Jason George, Senior Financial Sector Specialist, Financial Stability Institute, Switzerland

·        Continuous supervision

·        Meetings and communication with bank management, external auditors, etc.

·        Prioritising inherent risks according to importance

·        Risk profiles

·        Communication and co-ordination with other supervisory agencies (domestic and foreign)

·        Functional approach and targeted examinations

5. Risk-focused Supervision: On-site Examination Process and Products

 Mr Jason George, Senior Financial Sector Specialist, Financial Stability  Institute, Switzerland

·        Institutional overview

·        Risk matrix

·        Risk assessment

·        Supervisory plan – resources, timeline, etc.

·        Examination program

·        Scope memorandum

·        Entry letter

·         Examination report

6. The Supervisory Review Process

Mr Jean-Philippe Svoronos, Member of the Secretariat, Basel Committee on Banking Supervision, Switzerland

·        Assessment of capital in relation to a bank’s risk profile

·        Supervisory review of a bank’s capital assessment

·        Supervisory intervention

 7. Credit Risk Management: Sound Principles

 Mr Jason George, Senior Financial Sector Specialist, Financial Stability  Institute, Switzerland

·        Principles for the assessment of a bank’s management of credit risk

·        Establishing an appropriate credit risk environment

·        Maintaining an appropriate credit administration, measurement and monitoring process

·        Ensuring adequate controls over credit risk

8. Credit Risk Management: Supervisory Review

 Mr Jean-Philippe Svoronos, Member of the Secretariat, Basel Committee on Banking  Supervision, Switzerland

·         Types of approaches

·         Key indicators of credit risk problems

·         Follow-up with management

9. Asset Grading and Classification

Mr Jason George, Senior Financial Sector Specialist, Financial Stability  Institute, Switzerland

·        Five Cs of credit

·        Asset classification

·        Provisioning

 10. Case Study: Asset Grading and Classification  A     B

11. Corrective Actions for Weak Banks

Mr Errol Kruger, Deputy General Manager, Bank Supervision Department, South African Reserve Bank

·        Assessment of the weakness

·        Types of corrective actions

·        Enforcement of corrective actions

12. Resolution Strategies for Weak and Failed Banks

Mr Errol Kruger, Deputy General Manager, Bank Supervision Department, South African Reserve Bank

·         Restructuring plans

·          Mergers and acquisitions

·         Purchase and assumption transactions

·          Bridge banks

13. The Basic Framework of Corporate Governance, Including New Developments and Emerging Trends

Mr Mike Trigg, Group Head, Investigations and Group Money Laundering Reporting Officer, Standard Chartered Bank, UK

·        The board of directors and the board process

·        Executive management and the executive management process

·        Organisational models

·      Formal committees (with particular emphasis on audit committees)

·     Ad hoc committees

14. Supervisory Responsibilities Relative to Corporate Governance

Mr Errol Kruger, Deputy General Manager, Bank Supervision Department, South African Reserve Bank

·        Surveillance

·        The examination process

·        Disciplinary actions and sanctions

15. Corporate Governance - A Banker’s Perspective

 Local Speaker

16. Corporate Governance - the Internal Control Regime

Mr Mike Trigg, Group Head, Investigations and Group Money Laundering Reporting Officer, Standard Chartered Bank, UK

·        What is the “internal control regime”?

·        Defining and monitoring key risks

·        The flow of risk information

·        Role of the board of directors

·        Role of internal audit

17. External Audit

Mr Errol Kruger, Deputy General Manager, Bank Supervision Department, South African Reserve Bank

·        Responsibilities of the board and senior management vis-à-vis the external audit function

·        The role of the external auditor

·        The role of the banking supervisor

·        The relationship between the supervisor and the external auditor

18. Money Laundering and Effective Due Diligence

Mr Mike Trigg, Group Head, Investigations and Group Money Laundering Reporting Officer, Standard Chartered Bank, UK

·                Changing regulatory and legal requirements

·                Money laundering policy and standards

·                Know your customer (KYC) procedures

·                Staff training

·                Reporting transactions

19. Corporate Governance Case Study