Modern risk management practices and the new Basel Accord have important implications for operations and supervision of the financial sector, especially in emerging markets. Most financial institutions apply risk-based pricing, bank business is benchmarked against economic capital, risk is shifted across financial conglomerates, competition with international banks intensifies, while smaller financial institutions and public banks are struggling to keep pace. Regulators attempt to introduce consolidated supervision and to adopt Basel-II during the next five years but struggle with limited resources, independence, and elements of national discretion under Basel II. In this context, the World Bank is hosting the 3rd Risk Management Workshop on Assessing, Managing and Supervising Financial Risk, which is targeted for heads of supervision and chief risk officers from advanced emerging markets. The conference is organized by the Financial Sector Vice Presidency of the World Bank, the World Bank Institute and the Risk Waters Group.

This program focuses on advanced risk management skills that are needed to implement the three pillars of the new Basel II Accord. Perspectives for both market participants and supervisors are provided, with best practice examples from advanced internationally active banks. Knowledge sharing between senior executives and regulators as well as learning from case studies in developed markets are the main objectives. The program focuses on policy issues related to Basel II, risk-based supervision, data and risk infrastructure needs, credit and market risk modeling, operational risk measurement, and links to corporate governance. Discussion groups will identify regional priorities and elaborate on implementation strategies.

The program will be delivered in an interactive conference format which requires prior experience with risk management issues. The first day will cover policy and regulatory issues which are related to pillar II; the second day will address specific needs on risk systems and infrastructure with examples from G-7 countries; the third day will focus on credit risk and tools for risk sharing such as derivatives and securitization; the fourth day will introduce new models to measure and manage operational risk; and the final day will present issues related to pillar III on disclosure and corporate governance. Moreover, discussion groups are expected to present an action plan at the end of the workshop.

This workshop is designed for heads of supervision and chief risk officers who aim to implement the new Basel-II accord. It focuses on financial institutions (banks, conglomerates, insurance, trusts, securities) in emerging markets that are well advanced in risk management. Moreover, policy makers from industrialized countries and staff from international organizations (World Bank Group, IMF, Regional Development Banks, etc.) may also participate if space constraints allow.