Prudentiality and Regulations of the Romanian Banking System
The economic crisis has affected all types of banking products and services, business models, monitoring and evaluation methods known. In the banking industry the term „banking and prudential regulations” is increasingly used to highlight the need for regulations to ensure the legal framework for the conduct of the banking activity and that would establish responsible relations between banks and customers. The need for a prudential attitude imposed on the banks by the law derives primarily from the role of the banks and of the banking system in the economy.
The Romanian Banking Institute launches in the banking market a training program for the members of the management bodies and holders of key positions in a credit institution in order to satisfy the requirements formulated by the National Bank of Romania regarding the authorization of the credit institutions, Romanian legal individuals and Romanian branches of the credit institutions from third countries as amended and supplemented (NBR Regulation no.11/2007).
The program was conceived as a result of the document recently sent by the European Banking Authority for public consultation, entitled Guidance for analyzing the level of adequacy of the members of the management bodies and holders of key positions within a credit institution or of those running to occupy such a position. The provisions from the proposed Guide correspond also to the proposal of Directive of the European Commission regarding the activity of the credit institutions and prudential supervision of the credit institutions and of the investment societies (CRD IV).
The program aims: to offer to the participants an information/training program focused on the presentation and discussion of the NBR regulations by using training models that impose high professional standards on the transition from one stage to another throughout the career path in the banking field and maintaining them through a continuing professional education. The program has an interactive character and the participants have the possibility of dialogue and exchange of experience.
Target group: the persons nominated to exercise managerial responsibilities within the bank or its organizational structures, including from the perspective of the complexity degree, for the activity to be done within the bank.
The structure of the program was made according to the attached bibliography. The course is divided into modules:
Module A Corporate governance
Trainers Doru Bulată, BCR executive director
1. The management of credit institutions – definitions and notions
2. Management structure of credit institutions
3. Responsibilities of the management structure
4. The credit institution’s internal control
5. Disclosure and transparency requirements
6. Conditions for outsourcing activities of credit institutions
6.1 Outsourcing contract
6.2 Outsourcing notification
6.3 Outsourcing risk management
7. Reports to the NBR
Conclusions, questions, answers
Module B Significant risks
Trainers Arion Negrilă, BCR executive director
1. Management (administration) of significant risks
1.1. Basic principles of an improved system for risk management
1.2. Risk management function
1.3. Strategies, policies, processes
1.4. Credit risk
1.5. Market risk and interest rate risk in the banking book
1.6. Liquidity risk
1.7. Operational risk
2. Internal process for capital assessment to risks (ICAAP)
2.1. Economic capital (internal) – definition/differences from the regulatory capital
2.2. Types of risks covered by internal capital
2.3. Capital plans
2.4. Modern methods for assessing the economic capital
2.5. The role of stress testing (stress test)
3. The Methodology for calculating the prudential value adjustments (the RAS provisions)
3.1. Classification of loans and investments
3.2. Calculation of prudential value adjustments
3.3. Differences between the RAS/IFRS methodologies
3.4. Use of the RAS/IFRS provisions in the accounting and prudential reports
4. The main prudential reporting to the National Bank of Romania
4.1. Indicators of capital adequacy (solvency)
4.2. The large exposures and the exposures registered towards the persons being in special relations with the credit institution
4.3. Liquidity indicators
4.4. Indicators of foreign exchange position
5. Implementation of Basel III
5.1. The need for BASEL III
5.2. Increasing importance of the base capital of level 1 (core Tier 1)
5.3. Reducing the impact of pro-cyclicality
5.4. Buffers for preserving capital and countercyclical capital buffers
5.5. Liquidity risk indicators
Conclusions, questions, answers
Module C Audit and internal control
Trainer Mihai Bogdan, NBR Deputy Director
1. The internal audit function within the credit institution
1.1 Internal audit definition
1.3. Internal audit charter
1.4. Audit services and types of audit
1.5. The main features of the internal audit function
2. Audit committee
3. Outsourcing of internal audit
Conclusions, questions, answers
Lecturer – Doru Bebe Bulata, ICA, ACAMS
Doru, graduate in law, is Senior Advisor of EximBank Board of Directors on topics of Corporate governance, Risk and Compliance, he is a member of TRANSFOND SA Board of Directors and a member of R.A. Monetaria Statului (Romanian State Mint) Board of Directors. The expertise and experience of Mr. Bulată in Corporate Governance and the implementation of a coherent and effective framework of governance principles relies on his professional career, built both within top financial institutions, and in international organizations. His interest in the corporate governance system was transposed in setting up and implementation of strategies and policies. He has a rich experience in internal control and corporate governance, gained during his career as Head of Compliance in BCR, member of ONPCSB plenum, Romania’s representative in the Council of Europe – Moneyval Committee and member of EDMONT Group. His professional experience is validated by numerous international certifications, such as: Diploma in Compliance – ICA & University of Manchester, UK; Certified AML Specialist – ACAMS, USA. Mr. Bulată is an associated lecturer of RBI since 2005 and he is also a certified trainer and evaluator of professional competences.
Lecturer –Arion NEGRILA is Executive Vice President Risk (CRO) – BCR Housing Bank and Senior Advisor to BCR Executive Vice President Risk (CRO), having a broad experience in Risk Management of over 22 years. Previously he worked as Senior Executive Director – Risk at BCR. Between 2004 and 2014, he held the position of Executive Director of the Risk Controlling Division in BCR.
Since 2011, Arion holds a PhD in Economics – his thesis was on „Risk Management – important condition for high performing activity”. He also holds a Bachelor Degree in Economics (Academy of Economic Studies – Faculty of Finance, Banks and Accounting, Finance and Banks Department). Arion has attended numerous training courses on risk management and general management (Executive Development Program, organized by HEC University of Montreal, Canada, Academy of Economic Studies – Post-academic studies on bank and stock exchange management, several courses organized by Georgetown University – USA, ATTF Luxembourg, UBS Warburg – Switzerland etc.). Arion is an experienced associate lecturer at RBI, on issues related to banking risks.
Lecturer – Bogdan MIHAI, has been recently appointed Deputy Director, Directorate of International Economic Relations, within the National Bank of Romania. Mr. Bogdan Mihai has been a deputy director of the Internal Audit Division of the National Bank of Romania, having a ten years experience in the internal audit field. He has a Bachelor Degree in Economics (ASE – College of International Economical Relations) and one in Law (University of Bucharest), and is a graduate of an MBA program (financial management specialization – City University of Seattle – RBI) and a PhD in economics (currency – credit specialization, ASE, Bucharest). He has been collaborating with the RBI since 2007.
Schedule of program
The course will take place during two weeks, with a total of 14 hours, as follows:
Module A – 4 hours
Module B – 6 hours
Module C– 4 hours
The course will be organized open for a minimum of 6 participants or upon request at the premises of the beneficiary, within a one-to-one program (coaching).
The programme will held in English if people of other nationalities (expats) will attend the course, and otherwise it will be held in Romanian.
At the end of the course, participants will be given a certificate, issued by RBI (under the aegis of the founding members: NBR and RBA), with 14 CPD credits.