Course description

This course offers in-depth coverage of systems requirements, credit risk management best practices, risk and performance measurement, and a strong focus on capital adequacy issues. Subject areas covered include recent developments in regulatory and legal compliance, and ethics. Delegates will analyze case studies to explore examples of control inadequacies leading to liquidity crises, market manipulation and misuse of leverage.

Includes Online Pre-study Module

This course is accompanied by a preparatory course available online. Delegates will receive a web voucher as part of their joining instructions upon confirmation of registration. By taking advantage of this "blended" learning approach, in-class time and learning are optimized.

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Suitability

Class delegates include everyone from support staff to management from trading, risk management, operations, accounting, credit, and contracts groups. This one-day workshop is perfect for those concerned with "front office", "mid-office", and "back office" functions for international and domestic energy commodity companies (crude oil, petroleum products, natural gas, electricity and coal) and other commodities (grains, metals, etc.)

Content

Review of a best practice organizational structure and key functions
Overview of best practice risk system requirements
- In-house or off-the-shelf?
- How to evaluate a system
- Lessons learned from systems implementation
Capital Adequacy
- Credit risk management and controls
  - Calculating credit exposure
  - Portfolio credit risk measurement
  - Forward-looking credit models
  - Determining credit thresholds
  - Key issues with credit and collateral annexes
- Market price risk management and controls
  - Foundations for risk measures
  - Risk modeling issues
  - Price volatility issues
  - Application and strengths/weaknesses of value-at-risk
  - Other uses of value-at-risk
- Additional risks to control: operational, regulatory, others
- Stress Testing
  - Types of stress testing
  - Stress testing versus “at risk” measures
- Determining adequate capital
  - Key measures of capital adequacy
  - Cash-flow-at-risk
  - Impact of margin (collateral) on working capital
  - Capital adequacy framework
- Risk adjusted performance measurement
- Determining risk tolerance
Regulatory and legal compliance
- Regulation of trading and market manipulation
  - Overview of regulatory organizations
  - Market manipulation defined
- Dodd-Frank Act
  - Overview of the new regulatory regime
  - Swap Dealers and Major Swap Participants
  - End user exemptions
  - Clearing, margining, reporting and credit risk issues
  - Implications of Dodd-Frank
Ethics
- Definitions
- Shades of gray
- Organizational perceptions
- Ethics in energy trading