The Board of Governors of the Federal Reserve System held a seminar on Risk-Focused Supervision at the Joint Vienna Institute in the week of May 1. The course was presented to 30 participants from Armenia, Azerbaijan, Bulgaria, Georgia, Kosovo, Kyrgyzstan, Moldova, North Macedonia, Serbia, Tajikistan, Türkiye, and Uzbekistan.
The seminar utilized a single case study throughout the program to demonstrate the risk-focused approach to assessing and examining a financial institution's credit, market, liquidity, and operational activities. In addition, the course highlighted the core elements of the examination process, such as planning, implementation, and follow-up. Participants’ analytical and decision-making skills were enhanced through a healthy combination of lecture and case study review designed to simulate offsite and onsite risk assessment activities. Lectures focus on the three prominent risk categories of credit, operations, and market/liquidity. Each risk category lecture includes an overview of the processes and techniques for assessing inherent risk, risk management, residual risk, and an expectation of future impact on each risk. During the time designated to case study work, participants drew upon critical thinking skills to review institutional data, financial institution documents, and previous examination work papers and summary findings to identify and prioritize areas of risk and evaluate risk management processes. At the close of the course, participants successfully developed a written risk assessment identifying strengths and weaknesses for each functional area and assessing the overall risk of the institution.
Katie Kiresich, International Training & Assistance, Division of Supervision & Regulation, Board of Governors of the Federal Reserve System