Business Continuity Planning and Operational Risk Management for Central Banks

The independent world forum for central bankers and financial supervisors Asia Training Series 2012 Business Continuity Planning and Operational Risk...
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The independent world forum for central bankers and financial supervisors Asia Training Series 2012

Business Continuity Planning and Operational Risk Management for Central Banks 3-day intensive residential programme 4-6 December 2012 Shangri-La Hotel Kuala Lumpur Malaysia

Course chairperson: Wong Fot Chyi Director of School, East Asia Institute of Management and former Executive Director, Risk & Technology Management, Monetary Authority of Singapore Series advisor: Charles Goodhart Professor Emeritus London School of Economics Hosted by Central Banking Publications

Dear delegate, In 2012 no central bank needs convincing of the importance of operational risk and ensuring business continuity. Disasters – both natural and manmade – have sadly highlighted the need for central banks and financial market authorities to be prepared. And to be able to react. For central banks however, which sit at the apex of the financial structure, operational risk and business continuity planning (BCP) presents a double challenge. First, they must ensure a high level of robustness in their own critical operations: the central bank cannot be a source or amplifier of risk. Second, central banks must take an active interest in the operational risk and BCP arrangements within the financial sector, more broadly: systemic risk is a critical policy issue In both these however, practitioners increasingly recognise that BCP and operational risk are not just about systems: they are about people and processes. This new course “Business Continuity Planning and Operational Risk Management for Central Banks” will equip delegates with the tools to address these critical issues both within the central bank and financial sectors more broadly. The course will highlight successful strategies for operational risk management, emerging trends in enterprise wide risk management, and include case studies on crisis communications. Key topics include: • Enterprise-wide operational risk management for central banks

• Developing business continuity plans • Monitoring, measuring and reporting • Designing business recovery infrastructure • Role of the audit and risk committee The course will be chaired by Wong Fot Chyi, who brings a wealth of experience Director of School, East Asia Institute of Management and former Executive Director, Risk & Technology Management, Monetary Authority of Singapore. As ever, all seminars are held in closed-door roundtable setting to facilitate interaction. The focus is on finding practical, tailored ways to meet common challenges. This format, as more than 3,500 central bankers and public sector officials can attest, enables participants to quiz panellists and exchange views with peers in informal, confident surroundings. Please take a few moments to look through the detailed session descriptions in this brochure. I am sure that you will find topics and questions that resonate with the important work you are doing at your central bank today. I trust you will want to join your colleagues to discuss these, and I look forward to welcoming you to Kuala Lumpur on 4th December.

Yours sincerely,

Robert Pringle Chairman Central Banking Publications

Business Continuity Planning December 2012

Tuesday 4 December The benefits of the enterprise-wide approach What operational risk challenges do central banks face? In this introductory session, the chairman, will outline the main themes of the seminar and key challenges central banks face and will face in the future. The chairman, a former senior risk manager at the Monetary Authority of Singapore, will invite delegates to explore and share their views about the challenges they face with operational risks and business continuity and which issues they would like to focus during the course.

Organising effective enterprise risk management for central banks In this session, the speaker, a highly experienced business continuity manager, will demonstrate how the risk management function can be most effective, if it is unified and looks across both operational and financial risks. The delegates will be shown the transformation from a disparate and unstructured risk approach to a united and heterogeneous ERM-organisation that coordinates all the risk management of a Central Bank. The speaker will also describe how the risk management function works with strategic planning to create an effective governance structure. Delegates will share their experiences of organizing and managing operational risk and discuss how to work with other departments to ensure best practice.

A practical approach to enterprise risk management An effective enterprise risk management (ERM) system is one that is tailor fitted to the organisational structure and culture. In this session, the speaker will describe how an effective ERM framework, charter and manual was developed and implemented around four major pillars (Paradigm, Roles, Methods and Templates) to achieve a threefold objective of a) providing Senior Management with a global assessment of risks that would be useful in formulation and prioritization of sound and prudent policy proposals to the Board; b) promoting risk management consciousness in bank operations; and c) monitoring overall performance of enterprise risk management.

This was the best motivation and incentive my employer could have given me this year. About the course chairperson: Mr Wong is the Director of School for Accountancy, Banking and Finance at East Asia Institute of Management (EASB). Prior to joining EASB in April 2011, Mr Wong was a senior management member of the Monetary Authority of Singapore (MAS) with 24 years of experience in central banking. His long service career at the MAS covered the following central banking functions, the last 7 years of which was as head of department: economic / policy research, exchange rate policy formulation, monetary management operations, government bond market development, macroeconomic surveillance, financial stability assessment, and central bank risk management. During 2003-2010, he represented the MAS at different times at the Bank for International Settlements’ (BIS) Committee on Global Financial System (CGFS), Markets Committee (MC) and Committee on Payment and Settlement Systems (CPSS), and the Executives’ Meeting of East Asia-Pacific Central Banks’ (EMEAP) Working Group on Payment and Settlement Systems (WGPSS).

Wednesday 5 December Crisis preparedness and response Business continuity and private-public partnership for risk management Central banks needs to do their own business continuity planning but should also enforce the responsibility in the financial sector as a whole. Business continuity and disaster recovery plans needs to be coordinated and developed together with other vital institutions in the economy. In this session, the speaker will outline, in the form of case studies, how plans can been developed and tested within a central bank and how central bankers, financial institutions and other parts of the society can work together to identify and handle common operational risks to the industry. All efforts by this private-public partnership are aiming at keep the operations of the financial sector up and running, whatever happens.

Monitoring, measuring and reporting Reporting to senior management and collecting information from across the departments and central bank function are pivotal for any operational risk manager. This requires capturing operational risk statistics and converting them into key risk indicators, and then presenting those indicators in an actionable operational risk report that will capture the imagination of senior management. In this session the speaker will share their thoughts about how operational risks can be measured, managed and reported. The session will further focus on how new emerging risks can be identified through the use of control self-assessments, how to measure the severity of operational risk losses and their frequencies through scenario analysis, how to mitigate the key risks and focus on the key elements of an operational risk report, on how reports can be best presented and what can be done to follow up the reporting process.

Designing business recovery infrastructure One back-up site, two or three? These are the practical questions facing risk managers charged with ensuring a central bank can maintain the systems and services it provides. Here, however the tools of costbenefit analysis are of limited use as. Though remote, the potential damage to a national economy and a central bank’s reputation from an extreme event so great as to merit an “uneconomic” spend on BCP. This session will look in-depth at one central bank’s Business Recovery Infrastructure and analyse the decisionmaking process involved. Lessons will be drawn out on what services, functions and facilities a central bank should prioritise.

A case study: Japan crisis response - crisis communication In a crisis as important as how a central bank behaves is how it sounds and appears. Perception is all, which means managing communication. How a central bank communicates to markets and the public is of critical importance to maintaining its credibility and the smooth functioning of key systems. In this session, the speaker from the Bank of Japan will share with the group how the central bank managed to bring a consistent and calming message across to the wide population during the Great East Japan Earthquake.

Workshop: developing business continuity and disaster recovery plans In order to put together a business continuity and disaster recovery plan that will deal with central banks unique challenges, it is imperative to determine which are the business critical functions that need maximum safeguarding and how this safeguarding can be achieved; whether by moving such functions to a secondary facility or setting up mirrors systems. This workshop offers delegates the opportunity to share ideas about what are the main business continuity risks, which are the vital business functions, who are the key business people, and how these resources can be protected.

Business Continuity Planning December 2012

Thursday 6 December Engaging the institution Role of the audit and risk committee: involvement of internal audit For risk managers developing synergies with those in charge of internal audit can be highly beneficial. Internal audit is helpful in evaluating and giving assurance in risk management processes and in the reporting of key risks, and challenging management’s decisions on risk in general. However, in same measure, it is important to identify what roles internal auditors should not take on, such as setting the risk appetite of the institution and imposing risk management processes. In this session, the speaker will outline how internal auditors and operational risk managers can work together in order to better manage business and reputation risks.

Internal communication Crises are unpredictable and fast moving. To get the entire institution to adapt to the crisis situation in the desired way is to communicate quickly, clearly and widely. This is difficult because crises by their very nature upset ordered activity breaking existing communication channels, dislocating people and damaging infrastructure. This session will cover how central banks can strategically plan their internal communications, build communications capability, and leverage internal communications channels and techniques in order to be able to act as one in the case of a crisis.

Closing discussion: improving risk management awareness and culture The day and the course will conclude with a session led by the chairperson drawing in the main points of the course including the findings of the workshop. Delegates will be encouraged to pool their thoughts and prepare action points to take back to their home institutions.

For speaker details please visit:

About Central Banking Publications Central Banking Publications’ events division is the leading independent organiser of public policy seminars/training courses for the official sector. Since 1997, CBP has hosted roundtable seminars and training courses for over 3,500 senior policymakers from central banks, ministries of finance and financial regulatory agencies around the world. Senior officials from more than 125 countries have attended these meetings over the past ten years.

I have attended many workshops for central bankers. Those organised by Central Banking Publications are by far the best.

About Central Banking Training Courses Central Banking hosts training courses/seminars that have been attended by over 3,500 public sector officials from more than 125 countries. These training courses are exclusively for central banks and financial regulators. They have been specifically designed to equip you with the means to tackle the challenges you face and, allow free debate of sensitive issues in a confidential environment. Every year, the courses are refreshed and updated to cover the topics which matter the most to central bankers and regulators.

Other courses in this series taking place in the same week are: – Renminbi Internationalisation: Opportunities and Implications for Central Banks Chairperson: Shen Jianguang, Chief Asia Economist, Mizuho Securities Asia Limited – Basel III: Implementing the New Global Regulatory Framework Chairperson: Shyamala Gopinath, Former Deputy Governor, Reserve Bank of India – Reserves and Official Sector Portfolio Management Chairperson: Luděk Niedermayer, Director, Deloitte Consulting and former Vice Governor, Czech National Bank – Effective Oversight of Mobile Payments Chairperson: Paul Whitmore, Founder and Chairman, Consultancy Associates

Central banks who have attended in the past include: • Central Bank of Argentina • Reserve Bank of Australia • Austrian National Bank • Central Bank of Bahrain • The Bangladesh Bank • Central Bank of Barbados • Bermuda Monetary Authority • Central Bank of Bolivia • Central Bank of Bosnia & Herzegovina • Central Bank of Brazil • Bank of Canada • Eastern Caribbean Central Bank • People’s Bank of China • Central Bank of Egypt • European Central Bank • Banque de France • Deutsche Bundesbank • Bank of Guatemala • Hong Kong Monetary Authority • Central Bank of Iceland • Reserve Bank of India • Bank Indonesia

• Central Bank of Iraq • Bank of Israel • Banca d’Italia • Bank of Jamaica • Bank of Japan • Central Bank of Kenya • Bank of Korea • Bank of Latvia • Reserve Bank of Malawi • Bank Negara Malaysia • Bank of Mauritius • Bank of Mexico • Reserve Bank of New Zealand • State Bank of Pakistan • Bank of Papua New Guinea • Central Reserve Bank of Peru • Central Bank of the Philippines • Bank of Portugal • Central Bank of the Russian Federation • Saudi Arabian Monetary Agency • Central Bank of Seychelles • Monetary Authority of Singapore

• National Bank of Slovakia • Central Bank of Solomon Islands • South African Reserve Bank • Bank of Spain • Central Bank of Sri Lanka • Bank of Sudan • Swiss National Bank • Central Bank of the Republic of China, Taiwan • Bank of Tanzania • Bank of Thailand • Banking and Payments Authority of East Timor • Central Bank of Turkey • Central Bank of the United Arab Emirates • Bank of Uganda • Bank of England • Federal Reserve System • Reserve Bank of Vanuatu • Central Bank of Venezuela • Central Bank of West African States • Bank of Zambia

Business Continuity Planning December 2012

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Course fee: $3,600 (US) Course fee includes: 2 nights accommodation, meals, refreshments, course documentation and a complimentary copy of the most recent issue of the Central Banking journal. Substitute delegates can be accepted should the registered delegate be unable to attend; please let us know prior to the event.

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A great opportunity to share and learn.

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The venue Shangri-La Hotel 11 Jalan Sultan Ismail Kuala Lumpur 50250 Malaysia

Shangri-La Hotel, Kuala Lumpur, Malaysia Nestled amidst lush gardens in the heart of the city, the newly renovated Shangri-La Hotel, Kuala Lumpur sits just moments away from key business and shopping areas. The Hotels guest rooms and suits are appointed with modern amenities to offer only the very best in comfort to all of its guests. The Hotel also offers an impressive selection of cosmopolitan cuisines including the award winning Restaurant Lafite.

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