Risk Management for Central Banks - main page

Risk Management - main page

Risk Management for Central Banks

March 15 - 18

Chair: Janet Cosier, Former Adviser on Strategic Planning and Risk Management, Bank of Canada

Covid-19 has reshaped central bank risk management: forcing central bankers to rethink the risks they face and, ultimately, have to manage.

It has challenged them to work in new ways – and to manage the new risks resulting from this. 

It has highlighted new areas of interconnectedness – and disconnects.

It has strained well-thought-through contingency plans.

For those charged with managing risks in a central bank, the crisis has shown the importance of a robust yet flexible framework for managing the wide range of risks they face: from managing conduct risk and the human element, to reputational risk, to cyber and IT risks.

This course, “Risk Management for Central Banks” will give participants an understanding of the tools and methodologies used to create sound a risk management framework. Expert speakers will demonstrate how to turn theory and lessons from other sectors into central banking practice in monitoring and mitigating risks. From an institutional perspective, the course shows how to build and leverage an effective relationship between risk, internal audit and compliance.

Each day will feature three hours of expert-led live content to maximise the opportunity to share and learn. The Course chair will ensure participants have opportunities to network throughout the programme.


Global timezone: 11am-2pm (GMT) | 6am-9am (ET) | 7pm-10pm (SGT) 

Risk Management for Central Banks agenda

The risk management function and the current challenges it faces

11:0011:15

Course introduction and welcome
Course introduction session led by the chair

11:00 - 11:15

  • Introductions and welcome from the chairperson
  • Overview of the training course programme and speakers
  • Discussion of participant expectations and areas of particular interest

11:1511:45

Enabling the risk function: moving towards an integrated corporate management function

11:15 - 11:45

  • Overview of new roles, functions and responsibilities of risk management departments
  • Impacts of organisational developments on central bank risk management
  • Key components of a robust and responsive risk management framework
  • Discussion: where and how are risks managed in participants’ central banks?
Janet Cosier

Former Adviser on Strategic Planning and Risk Management

Bank of Canada

Janet Cosier is the former Chief Risk Officer and Adviser on Strategic Planning at the Bank of Canada. She continues in her capacity as the Chair of the Board of Directors of the Canadian Payments Association. She has served in a variety of functions including comptroller and chief accountant, as well as chief internal auditor, before being appointed adviser to the governor. She has provided technical assistance to various central banks in the areas of strategic planning, risk management, governance and financial reporting. Before joining the Bank of Canada, she worked with the Office of the Auditor General of Canada and with the Department of Industry, Trade and Commerce. Mrs Cosier holds degrees from York University and the University of Windsor in mathematics, computer science, accounting and financial management.

11:4512:00

Break

11:45 - 12:00


 

12:0012:45

Internal audit and compliance: efficient operations in three lines of defence set up

12:00 - 12:45

  • Internal audit – the what and why’s
  • Independence and objectivity of Internal Audit functions
  • How can internal audit and risk management work together?
  • Discussion: Your expectations of internal audit and how can you enhance interactions with internal audit at your organisation?
Mads Kristensen

Assistant Director, Internal Audit

Norges Bank

Mads G. Kristensen is the deputy head of the Internal Audit department at Norges Bank. He is certified as a state authorised public accountant as well as an internal auditor. A substantial part of his work is devoted to the banks operations for managing the Government Pension Fund Global, which is one of the largest sovereign wealth funds in the world. Mr. Kristensen holds an MSc in Accounting and Auditing from BI Norwegian Business School.

12:4513:00

Break

12:45 - 13:00

13:0013:45

Cyber risk and the evolving threat landscape

13:00 - 13:45

  • Overview of the current cyber threat landscape
  • Emergence of new risks and the evolution of existing risks
  • Examples of strategies and responses to digital disruption and cyber attacks
  • Discussion: what does it take to resource a modern cyber resilience function?
Manit Sahib

Head of Penetration Testing

Bank of England

Manit Sahib is the Head of Penetration Testing at the Bank of England. He is an Offensive Security (OSCP) and CREST certified tester with NCSC’s CHECK status. Previously a security consultant at PwC, he has obtained a vast amount of technical experience from a variety of global organisations. Now, leading BoE’s offensive team to plug the gaps in a collaborative approach.

Business continuity planning in light of Covid-19

11:0011:45

Building resilience through an effective BCP

11:00 - 11:45

  • Building and managing an effective BCP programme
  • Testing and exercising the BC plans to strengthen resilience
  • Measures & protocols during Covid-19
Muhammad Akmal

Director Strategic Planning

State Bank of Pakistan

11:4512:00

Break

11:45 - 12:00


 

12:0012:45

Responding to disruptive events - invoking BCP during Covid-19

12:00 - 12:45

  • Challenges faced during invocation of BCP
  • What were the communication issues with mobile/networks/power breakdown?
  • What was the impact of working from Backup/Alternate working site?
  • Discussion: how have BCP/back-up arrangements changed over the past year?
Shehzad Ali Sharif

Joint Director, Strategic Planning Department

State Bank of Pakistan

12:4513:00

Break

12:45 - 13:00

13:0013:45

How central counterparties dealt with Covid-19

13:00 - 13:45

  • 2020 saw unprecedented market moves due to COVID-19 and financial market infrastructures including central counterparties needed to respond.
  • Total margins were raised by CCPs worldwide due to the high volatility but needed to be balanced to mitigate procyclical effects.
  • Pandemic and cyber crisis management exercises (conducted some years ago) revealed substantial operational risk issues but the experience so far has been positive
Ron Berndsen

Chair of Financial Market Infrastructures and Risk

Tilburg University

Professor Ron Berndsen is an independent director of LCH and chairs the LCH Risk Committees. He is also attached to the Tilburg School of Economics and Management at Tilburg University as full professor of Financial Market Infrastructures and Systemic Risk.

Ron is editor-in-chief of the Journal of Financial Market Infrastructures and a member of the Advisory Council of the SWIFT Institute.

The author has been active in the field of payments and market infrastructures for over 15 years. He was Head of the Oversight Department and Head of the Market Infrastructures Policy Department at De Nederlandsche Bank. Ron also served as a member on the Market Infrastructure Board at the European Central Bank and as member of the Committee on Payments and Market Infrastructures at the Bank of International Settlements. He also co-chaired the FSB Group on Cross-Border Crisis Management for Financial Market Infrastructures and was a member of the oversight committees of CLS, EuroCCP, Euroclear, LCH, SWIFT and TARGET2. 

He was awarded a doctorate of Tilburg University in 1992 for his PhD thesis in Economics and Artificial Intelligence.

Risk management: conduct and culture

11:0011:45

Conduct risk and the human element

11:00 - 11:45

  • What are the main drivers of conduct risk?
  • How can you measure the human element present in risk events?
  • What are the challenges for managing conduct risk?
  • Discussion: what is the most effective way of incorporating conduct risk in to the risk management framework?

11:4512:00

Break

11:45 - 12:00


 

12:0012:45

Reputation risk and building trust with employees, clients, shareholders, regulators and the public

12:00 - 12:45

  • Key factors and dynamics affecting a central banks reputation
  • Examples of how to avoid reputational damage through revisionary frameworks and reforms
  • Methods and tools of how board members can view operational, financial and reputational risks
  • Discussion: establishing the tools that will be used to identify and monitor reputational risks

12:4513:00

Break

12:45 - 13:00

13:0013:45

Enhancing the culture of risk management: effective steps for successful implementation

13:00 - 13:45

  • Key building blocks of the risk awareness culture
  • Examples of strategies to strengthen the risk awareness culture in central banks
  • The role of risk awareness in organisational resilience
  • Discussion: how to build a risk culture for 2021 and beyond
Janet Cosier

Former Adviser on Strategic Planning and Risk Management

Bank of Canada

Janet Cosier is the former Chief Risk Officer and Adviser on Strategic Planning at the Bank of Canada. She continues in her capacity as the Chair of the Board of Directors of the Canadian Payments Association. She has served in a variety of functions including comptroller and chief accountant, as well as chief internal auditor, before being appointed adviser to the governor. She has provided technical assistance to various central banks in the areas of strategic planning, risk management, governance and financial reporting. Before joining the Bank of Canada, she worked with the Office of the Auditor General of Canada and with the Department of Industry, Trade and Commerce. Mrs Cosier holds degrees from York University and the University of Windsor in mathematics, computer science, accounting and financial management.

Risk management tools and methodologies

11:0011:45

Modernizing KRIs and risk appetite for central banks

11:00 - 11:45

  • A risk appetite statement: use of this framework in a central bank
  • How this framework can be a means to improve risk culture and awareness
  • Achieving sufficient granularity to cover all the main risks of the institution
  • Case study: how a central bank covers this issue; the pros and cons: an example from the Bank of Portugal
Gabriel Andrade

Director and Head of the Risk Management Department

Bank of Portugal

Gabriel Andrade is the head of the Risk Management Department at Banco de Portugal, which he has been responsible for since October 2014. He is also a member of the International Operational Risk Working Group (IORWG) and has worked with the technical assistance division of the International Monetary Fund (IMF). From 1987 to 2013, Mr. Andrade worked in the private banking sector, spending 3 years at Banco Português do Atlântico and 20 years with Barclays Bank. He holds an Economics degree from the Lisbon School of Economics (ISE), as well as numerous post-graduate degrees elsewhere, including Universidade Católica Portuguesa (UCP), AESE Business school (AESE / IESE) and Universidade Nova de Lisboa (UNL).

11:4512:00

Break

11:45 - 12:00


 

12:0012:45

Building a sound framework for risk monitoring and reporting

12:00 - 12:45

  • What is an effective method of tracking risks?
  • How to choose quality metrics
  • What is an effective risk response measure?
  • What is the adequate frequency of monitoring risks and the changes needed?

12:4513:00

Break

12:45 - 13:00

13:0013:30

Closing remarks and delegate action plans
Concluding session led by the chair

13:00 - 13:45

  • Summary of the course
  • Discussion of the observed trends and case studies
  • Application of learning points in the delegates’ home organisations
  • Preparation of action points
Antti Heinonen

Chairman

Banknote Ethics Initiative

Antti Heinonen has been the chairman of Banknote Ethics Initiative since its inception in 2013. He was the chairman of the Central Bank Counterfeit Deterrence Group between 2008 and 2012 and the Director, Banknotes at the ECB from 1998 until 2008. He chaired the Banknote Committee of the European System of Central Banks for more than 10 years and the Eurosystem Cash Changeover Co-ordination Committee in 2001 and 2002. Prior to joining the ECB he was the chief cashier for the Bank of Finland. He holds degrees in economics and mathematics from the University of Helsinki, and has recently written two books, one on the history of Finland’s markka banknotes, and another on euro banknotes. The latter is also translated in English (The First Euros) and German (Die Ersten Euros).

 

Central Banking’s Post Training is a chair-led forum where participants can bring further questions or discussion points to group, after the live content and self-paced learning elements. What has worked, and what has not? Post Training focuses on questions that may have arisen since returning, the challenges of implementation and the setting of medium-term goals. Participants are encouraged to bring a short presentation, or questions on a particular topic, to gain the most from the discussions with peers.

11:0012:00

Post course catch up
Zoom link to be sent to you after the conclusion of the live content

11:00 - 12:00

Benefits of attending the post course catch up:

  • Developments in the area since the live content sessions, including new resource material
  • Questions arising since returning to the central bank
  • Challenges of implementation: where are the roadblocks?
  • Medium-term goals: what is realistic?
  • Establishment of group network to keep in touch peers and share best practices

Learning outcomes

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

  • Understand how to create a framework for managing a wide variety of risks and enhance the culture of risk management
  • Define a way that internal audit and risk management can work together
  • Recognise the emerging risks in the cyber threat landscape and how to create a cyber resilience function
  • Understand the operational risk issues with use of central counterparties
  • Establish the tools that will be used to identify and monitor reputational risks

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Janet Cosier

Former adviser on strategic planning and risk management

Bank of Canada

Janet Cosier is the former Chief Risk Officer and Adviser on Strategic Planning at the Bank of Canada. She continues in her capacity as the Chair of the Board of Directors of the Canadian Payments Association. She has served in a variety of functions including comptroller and chief accountant, as well as chief internal auditor, before being appointed adviser to the governor. She has provided technical assistance to various central banks in the areas of strategic planning, risk management, governance and financial reporting. Before joining the Bank of Canada, she worked with the Office of the Auditor General of Canada and with the Department of Industry, Trade and Commerce. Mrs Cosier holds degrees from York University and the University of Windsor in mathematics, computer science, accounting and financial management.