The measurement of risk has further important implications for risk management as it is increasingly incorporated into the performance evaluation process. Since resources are allocated and bonuses paid on the basis of performance measures, it is essential that they be appropriately adjusted for risk. Only then will appropriate incentives be created for behavior that is beneficial for shareholders and other stakeholders. The seminar explores this fundamental idea at general level, since it is relevant for each of the three risk areas that follow.

 

​At the end of Intrinsic Value's training seminar in capital allocation and RAPM the participant should be able to:

􀂅  Describe the Role of Capital in a Financial Institution.

􀂅  Define and Describe the different types of capital.

􀂅  Demonstrate Economic Capital.

􀂅  Describe the different approaches to calculating Economic Capital.

􀂅  Describe Regulatory Capitaln.

􀂅  Explain the Basel Norms.

􀂅  Explain the Derivation of Regulatory Capital.

􀂅  Explain Capital Allocation.

􀂅  Demonstrate   the   Risk   Contribution   Methodologies  for  Economic

     Capital Allocation.

􀂅  Explain Risk Adjusted Performance Measurement (RAPM).

􀂅  Demonstrate Risk Adjusted Return On Capital (RAROC).