The basic attributes and structure of Asset Securitization
Various types of asset-backed securities such as Residential Mortgage Backed Securities (RMBS), Credit Card Securitization, etc.
Credit Default Swaps (CDS) and Collateralized Debt Obligations (CDO) and their role in managing (sometimes, augmenting) risks in any financial system
How to measure, analyze and proactively manage the degree of risk embedded in the financial assets portfolio of any entity, using various tools and techniques such as ‘Value at Risk’ (VaR), ‘Stress Testing’ and similar guidelines issued by the Bank of International Settlement (BIS) and other regulatory bodies
How well could the Basel-III guidelines on capital adequacy: (a) achieve the well-intentioned goal of safeguarding the stability of financial systems across countries and (b) anticipate / avert cascading adverse outcomes as witnessed in the global financial crisis of 2008
In this advanced course, part of the Professional Certificate program ‘Risk Management in Banking and Financial Markets’, we will look at structured financial products such as Asset Backed Securities (ABS), Residential Mortgage Backed Securities (RMBS), Credit Default Swaps (CDS), Collateralized Debt Obligations (CDO) and their role in transferring/diversifying the risks to several entities in the financial markets.
We will also examine the unintended consequences and outcome of those risk transfer instruments that accentuated the systemic risk and eventually lead to the 2008 global financial meltdown.
In addition, we will look at special topics in risk management such as Value at Risk (VaR) and stress testing, as well as recent trends in regulation including the Basel-III guidelines on capital adequacy that have been implemented in several countries to manage risk in a proactive and consistent manner.
More importantly, we will examine how far have those regulatory measures and guidelines been able to achieve the well-intentioned goal of safeguarding the stability of financial systems across countries and whether they would, in the future, be able to anticipate and avert cascading adverse outcomes as witnessed in the 2008 global financial crisis.
This course is part of IIMBx’s Professional Certificate program ‘Risk Management in Banking and Financial Markets’.
Participants should have gained, either through formal education or through work-experience or by attending the first four courses’ in this Professional Certificate program:
A good understanding of the concepts and theories underlying banking and financial markets such as Time Value of Money, Pricing of Bonds and Equity Stocks, Theory and Structure of Interest Rates, etc.
Structure and functioning of Short-Term and Long-Term Financial Markets.
Tools and techniques to manage the various types of risk (such as credit risk, interest rate risk, foreign exchange risk, liquidity risk, etc.) embedded in any financial system.
A good understanding of probability and statistics, covering measurement of central tendencies (mean, median, mode, standard deviation), statistical distributions, correlation and regression, etc. will significantly help in the learning.