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The Certified Islamic Specialist in Risk Management Introduction: Due to the sheer nature of their varied and complex activities, banks are often exposed to an array of risks such as credit risks, market risks, operational risks and liquidity risk.etc. Therefore, the issue of risk management has become the center of considerable attention from both regulatory and supervisory authorities. There has emerged a pressing need to follow proper procedures for the implementation of all elements of risk management, including risk identification, measurement, mitigation, monitoring, reporting to supervisory authorities, and eventually controlling. These procedures necessitate the adoption of appropriate policies and the establishment of limits, procedures, information systems, effective management of decision-making and preparation of internal reports about the risks commensurate with the scope and sphere of its activity. At the level of issues relating to risk management, Islamic financial institutions need to develop more rigorous systems in order to identify, measure, monitor and control risk categories relevant to their products and services. This is because the nature of the work of Islamic financial institutions and the characteristics of their products require a deep analysis so as to identify the types of traditional risks they face jointly with traditional products. Added to that is the need to identify the exceptional risks that are unique to Islamic financial services industry. Islamic financial institutions also show interest in identifying effective means to address those risks, reduce their scope, and deal with them in compliance with the rules and principles of Islamic law. Risk assessment necessitates bringing up the issue of the equation of capital adequacy and the examination of the Basel agreements and the stages of their development, their contexts and contents. It also requires the evaluation of impacts of those agreements on Islamic financial institutions, and the appraisal of reasons that call for the institution of capital adequacy standard suitable for their specificity and legal nature. It is also imperative to state the standards devised by the supporting institutions and explain and analyze these standards whether those issued by AAOIFI Accounting and Auditing Organization for Islamic Financial Institutions in Bahrain or those developed by the IFSB Islamic financial services Board in Malaysia. 2
CIS in Risk Management 7 Objectives: Target Audience: 1. 2. 3. 4. Definition of the types of common risks faced by both traditional and Islamic financial institutions and survey of risks special to Islamic Financial Institutions Understanding the environment and the right tools to manage risks in Islamic financial institutions and identification of relevant techniques including methods and procedures for determining their quantity, type, ways to measure them, reports evaluation and management Study the most important Islamic legal requirements for risk management, the sound and legitimate controls and foundations to address those risks and minimize their impact Introduction of international and Islamic standards in risk management 1. 2. 3. 4. 5. 6. Managers and officials of the risk departments Financial Supervisors and officials of the Internal Audit Officials of the finance and investment departments Officials of the Sharia Supervisory departments Officials of the treasury departments Managers of the compliance departments 3
The Certified Islamic Specialist in Risk Management Program of the Certificate 1. Introduction to risks in financial institutions Concept and nature of risks faced by financial institutions Concept of ambiguity and its relationship to risk-taking Importance of risk management, its mechanisms and the impact of the failure to address them Relationship between risk and crises of financial institutions Nature of the risks faced by Islamic financial institutions Identification of the difference between risk measurement and risk management International bodies related to risk management worldwide Role of the the Islamic financial services Board IFSB in the field of risk management in Islamic financial institutions. 2. Types of risks in financial institutions Analysis of the various elements of budgets of Islamic Banks and determining the degree of risk Statement of the quality of risk that can be discarded, the risks that can be converted, and the risks inherent in the nature of the work of the financial institution and have to be addressed Forms of Islamic finance and the various relevant types of risks related to them Relationship between funding formulas and credit, market and operating risks Relationship between risk formulas and regulatory capital of Islamic banks Sources of funds in financial institutions and capital adequacy standard 4
3. Risk management in accordance with international and Islamic standards CIS in Risk Management 7 Risk management from the perspective of the Basel Committee Risk management from the perspective of the IFSB Islamic Financial Services Board. A comparative study of the most important elements of agreement between both standards Elements of risk management in Islamic financial institutions Risk of Islamic legal compliance in Islamic financial institutions 5. Market risk management in Islamic financial institutions Definition and types of market risks Factors affecting market risks and their relationship to market values fluctuations Risks of commodity prices, currencies, stocks and securities Models for risk analysis (risk pooling, The Monte Carlo model etc.) Parallel Contracts in Islamic modes of finance Duration Analysis models (gap) and the value at risk Legitimate means to reduce market risk Appropriate policies and procedures for the market risk management 4.Credit risk management in Islamic financial institutions Definition and types of credit risk credit risk in the various stages of the implementation modes of Islamic financing and investment Sources of credit risk in the non-fulfillment of obligations and the outcomes of the external environment factors Components of credit risk and methods of its measurement and reporting Appropriate policies and procedures to manage credit risk Legal mechanisms and processes to reduce credit risk 5
The Certified Islamic Specialist in Risk Management 6. Operational risk management in Islamic financial institutions Definition of the risk of the rate on return and its nature Ways to manage the risk of the rate on return and legitimate ways to deal with the rate of profit reserves and reserves of investment risk Determining the risk of loss resulting from the inadequacy or failure of internal procedures and systems in financial institutions Identifying the risks of non-compliance with Islamic Sharia,their requirements and their impact on Islamic financial institutions Importance of the development and implementation of prudential regulatory environment for operational risk management Credit risks and the protection of the interests of all providers of funds 7. Liquidity risk management in Islamic financial institutions Definition of liquidity risk Essential elements of effective management of liquidity Funding structure, the concentration of resources available to Islamic financial institutions and their relation to liquidity risk Nature of the providers of funds in Islamic financial institutions and the harmonization of assets and liabilities Quantitative and qualitative factors in liquidity management policies Cash flows and liquidity management Ways to reduce liquidity risk, and the contingency plan to cope with crises 6
Registration Form Professional Advanced Diploma in Islamic Finance Image Trainee Registration Date:...... Full Name (English ):... Full Name (in Arabic ):... Nationality :... Date of Birth :... Occupation :...Years of experience :... ID Number:...E-mail :... Mobile :...State :... Postal Address:...... Employer :........................ Education:........................