Module

Operational Risk

Module description

This module is intended for Financial Services Professional Degree Apprenticeship students who would like a background to operational risk management framework in financial institutions. The module introduces four common categories of financial risk – credit, market liquidity and operational – providing a brief contextual overview of the first three and focusing particularly on the latter. Operational risk and some of the more important aspects of its management are described in detail.

Full module specification

Module title:Operational Risk
Module code:BEF2001DA
Module level:2
Academic year:2019/0
Module lecturers:
Module credit:15
ECTS value:

7.5

Pre-requisites:

None

Co-requisites:

None

Duration of module: Duration (weeks) - term 1:

11

Module aims

This module aims to provide students with an overview on the importance of risk in all industries and all walks of life. You will be able to explain what financial risk means and examine where the category of operational risk fits into the overall picture. Some of the high-profile events that have served to highlight the critical need to understand and manage operational risk effectively will be discussed.

The overall aim is to introduce the basic methods of measurement and some common mitigation techniques for financial risks that are of major concern to financial institutions. Cultural and leadership issues will be introduced to highlight the importance of developing a favourable environment for risk management. The module also emphasises the importance of a firm-wide approach in tackling operational risks that have been identified or those that may occur in the future. Students should be able to apply the theoretical concepts learnt in this module to simple and practical situations.

ILO: Module-specific skills

  • 1. Identify the major risk categories: credit risk; market risk; operational risk; liquidity risk
  • 2. Describe the objectives and challenges in Enterprise Risk Management
  • 3. Evaluate the operational risk issues linked with recent major risk-related events in the financial services industry
  • 4. Explain the techniques for measuring credit risk: credit exposure management, credit risk premium, credit ratings, modern measurement techniques
  • 5. Understand the role of liquidity and market risk management function
  • 6. Describe the underlying assessment and measurement of operational risk and difficulties in measuring operational risk
  • 7. Identify the practical problems of risk identification: changes to business operation models; changes to business environment
  • 8. Apply risk assessment and risk measurement to practical examples; rating and ranking; risk and control self-assessment; scenario analysis; benchmarking; risk event analysis
  • 9. Recognise the practical constraints of implementing an operational risk management framework

ILO: Discipline-specific skills

  • 10. Apply methods of risk assessment to practical examples and evaluate plans for potential risk events that may impact the business
  • 11. Recognise the importance of effective leadership in sustaining a robust risk and control culture
  • 12. Understand the main functions of operational risk reporting to internal and external stakeholders

ILO: Personal and key skills

  • 13. Understand the importance of training and education in operational risk management
  • 14. Critically analyse the importance of communication with support and control functions to foster an operational risk aware culture

Learning activities and teaching methods (given in hours of study time)

Scheduled Learning and Teaching ActivitiesGuided independent studyPlacement / study abroad
321180

Details of learning activities and teaching methods

CategoryHours of study timeDescription
Scheduled Learning & Teaching Activities14 hours (2 days)Masterclass/workshops
Scheduled Learning & Teaching activities14 hoursOnline lectures and webinars
Scheduled Learning & Teaching activities4 hoursRevision
Guided independent study118 hoursReading and research, web-based activities

Formative assessment

Form of assessmentSize of the assessment (eg length / duration)ILOs assessedFeedback method
Mock Exam1-hour 50 MCQs1-9Marks and feedback
Online DiscussionOnline discussion contributions1-15Online discussion feedback from peers and lecturer
Weekly online quizzesFour quizzes, each taking about 20 minutes1-15Correct answers on ELE

Summative assessment (% of credit)

CourseworkWritten examsPractical exams
50500

Details of summative assessment

Form of assessment% of creditSize of the assessment (eg length / duration)ILOs assessedFeedback method
Exam501-hour 50 MCQs1-9
Applied exercise Assignment502,000 words1-15
0
0
0
0

Details of re-assessment (where required by referral or deferral)

Original form of assessmentForm of re-assessmentILOs re-assessedTimescale for re-assessment
Exam50% 1-hour 50 MCQs1-9Next available opportunity
Applied exercise Assignment50% 2,000 words1-15

Re-assessment notes

Defer – as first time

Refer – capped at 40%

Syllabus plan

  • Risk Basics
  • Other Major Risks
  • The Nature of Operational Risk
  • The Causes and Impacts of Operational Risk
  • Operational Risks Arising in the Trade Cycle
  • The Support and Control Functions
  • Operational Risk in the Regulatory Environment

Indicative learning resources - Basic reading

Basic reading:

  • Operational Risk (Investment Operations Certificate) Workbook Ed23, the Chartered Institute for Securities and Investment.

Module has an active ELE page?

Yes

Origin date

27/02/2019

Last revision date

15/03/2019