Operational Risk

This Intermediate Operational Risk and Compliance Test is designed to assess key competencies needed in banking risk management. A particular emphasis is placed on the management of losses attributed to failed internal processes; an integral skill for individuals responsible for ensuring a bank's operations function smoothly and securely.

Credit risk is examined in depth, exploring its implications beyond individual borrower defaults and identifying patterns and behaviors that may signal broader credit risks for the bank. Stress Testing is also underscored as a crucial skill set in maneuvers to navigate crises and endure financial turbulence.

Candidates are tested on their familiarity with data protection, specifically the framework of the GDPR (General Data Protection Regulation). The test also frames liquidity management, through the Liquidity Coverage Ratio (LCR), as critical for maintaining bank stability, and addresses client management and corporate responsibility with topics on High-Net-Worth Individuals (HNWIs) and Sarbanes-Oxley governance.

Furthermore, this intermediate test ensures that individuals possess an aptitude for differentiation and evaluation across various financial instruments, regulatory environments, and risk management methodologies. Competency is further exemplified through scenarios examining the impact of the Dodd-Frank Act as a response to financial crises and the implications of Net Interest Margin on a bank's profit and loss dimensions.

Other areas explored also include market risk, exposure types, compliance roles, fintech advancements, and core central bank functions, with an additional focus on financial inclusion, IFRS standards, capital adequacy, and interest rate risk. 

In summary, this test provides a thorough assessment in risk and compliance, enabling professionals to validate and strengthen their capabilities in the evolving banking sector.