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: | 2023/4 |
| 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 Activities | Guided independent study | Placement / study abroad |
|---|---|---|
| 32 | 118 | 0 |
Details of learning activities and teaching methods
| Category | Hours of study time | Description |
|---|---|---|
| Scheduled Learning & Teaching Activities | 14 hours (2 days) | Masterclass/workshops |
| Scheduled Learning & Teaching activities | 14 hours | Online lectures and webinars |
| Scheduled Learning & Teaching activities | 4 hours | Revision |
| Guided independent study | 118 hours | Reading and research, web-based activities |
Formative assessment
| Form of assessment | Size of the assessment (eg length / duration) | ILOs assessed | Feedback method |
|---|---|---|---|
| Mock Exam | 1-hour 50 MCQs | 1-9 | Marks and feedback |
| Online Discussion | Online discussion contributions | 1-15 | Online discussion feedback from peers and lecturer |
| Weekly online quizzes | Four quizzes, each taking about 20 minutes | 1-15 | Correct answers on ELE |
Summative assessment (% of credit)
| Coursework | Written exams | Practical exams |
|---|---|---|
| 50 | 50 | 0 |
Details of summative assessment
| Form of assessment | % of credit | Size of the assessment (eg length / duration) | ILOs assessed | Feedback method |
|---|---|---|---|---|
| Exam | 50 | 1-hour 50 MCQs | 1-9 | |
| Applied exercise Assignment | 50 | 2,000 words | 1-15 | |
| 0 | ||||
| 0 | ||||
| 0 | ||||
| 0 |
Details of re-assessment (where required by referral or deferral)
| Original form of assessment | Form of re-assessment | ILOs re-assessed | Timescale for re-assessment |
|---|---|---|---|
| Exam | 50% 1-hour 50 MCQs | 1-9 | Next available opportunity |
| Applied exercise Assignment | 50% 2,000 words | 1-15 |
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