Course Overview

Why did global banks nearly collapse during the financial crisis, and what critical lessons prompted regulators to tighten rules and standards? The answer lies in the Basel Accords — a comprehensive framework that fundamentally reshaped how banks approach risk management, capital allocation, and systemic stability. With the introduction of Basel III, the standards became significantly stricter, placing greater pressure on banks to demonstrate genuine resilience against financial shocks while ensuring transparency and accountability to regulators and financial markets.

The Bank Capital Adequacy Under Basel III course by Transformentors Academy takes you directly into this essential regulatory framework. Across five intensive days, you’ll unpack the underlying logic of Basel III, master how capital requirements are structured and calculated, and explore how credit risk, market risk, operational risk, and liquidity risk are measured and effectively controlled.

This comprehensive programme will equip you with practical, immediately applicable tools to interpret bank disclosures accurately, calculate critical regulatory ratios, and understand how Basel III regulations impact real-world banking decisions, strategy, and operations.

Agenda

Day — 1 Introduction to Basel Accords 

• Reviewing the historical context and evolution of the Basel Accords and understanding the drivers that prompted their development
• Describing the structure and governance of the Basel Committee for Banking Supervision (BCBS) and its role in standard-setting
• Exploring the three Basel Accords and their progressive enhancements to banking regulation, including:
  • Basel I
  • Basel II
  • Basel III
• Understanding the three foundational pillars of the Basel Accords that form the framework’s architecture, including:
  • Minimum Capital Requirements
  • Supervisory Review Processes
  • Market Discipline and Transparency
• Defining systemically important banks (SIBs) and Global Systemically Important Banks (G-SIBs) and understanding the specific rules that govern them
• Discussing the finalisation of Basel III standards and understanding Basel IV enhancements and ongoing regulatory evolution
• Exploring key regulatory resources including the BIS, BCBS, and EBA websites for current guidance and documentation

Day — 2 Capital Structure under Basel III

• Exploring the components of regulatory capital defined under Basel III, including:
  • Common Equity Tier 1 (CET1) Capital
  • Additional Tier 1 (AT1) Capital
  • Tier 2 Capital
• Understanding Basel III capital buffers and their specific requirements for maintaining bank resilience, including:
  • Capital Conservation Buffer (CCB)
  • Countercyclical Capital Buffer (CCyB)
• Exploring the diverse types of risks present in banking operations and understanding their potential consequences for stability
• Explaining the critical role of risk-weighted assets (RWA) in calculating capital requirements and measuring risk exposure
• Defining leverage and liquidity measures under Basel III and their importance in ensuring banking system stability
• Case Study: Analysing a real bank’s regulatory capital disclosure to understand practical application of Basel III requirements

Day — 3 Risk-Weighted Assets (RWA) and Credit Risk 

• Reviewing expected credit losses under different accounting and regulatory standards and their measurement approaches
• Defining the three core components of credit risk that determine capital requirements, including:
  • Probability of Default (PD)
  • Loss Given Default (LGD)
  • Exposure at Default (EAD)
• Exploring the methods available for calculating credit risk-weighted assets (RWAs), including:
• The Standardized Approach (SA)
  • The Foundation Internal Ratings-Based Approach (FIRB)
  • The Advanced Internal Ratings-Based Approach (AIRB)
  • Understanding Counterparty Credit Risk (CCR) and Credit Valuation Adjustment (CVA) and their role in capital calculations
• Exploring credit risk mitigation techniques that reduce capital requirements, including:
  • Derivatives netting arrangements
  • Collateral recognition and valuation
  • Credit derivatives and hedging instruments
• Exercise: Practicing the computation of RWA and CVA for a realistic credit portfolio using Basel III methodologies

Day — 4 Market Risk

• Exploring the diverse sources of market risk in banking operations and their potential impact on capital adequacy
• Understanding the Standardized Approach (SA) for calculating market risk capital requirements
• Explaining the Basel III framework for market risk assessment, commonly referred to as the Fundamental Review of the Trading Book (FRTB)
• Discussing the Internal Models Approach (IMA) for market risk measurement and capital calculation, including:
  • Value at Risk (VaR) and Stressed VaR methodologies
  • Expected Shortfall (ES) as a risk measure
  • Incremental Risk Charge for default risk
• Understanding leverage ratio requirements that apply to off-balance sheet exposures and limit balance sheet expansion
• Discussing Interest Rate Risk in the Banking Book (IRRBB) under Basel III and its measurement and management
• Exercise: Practicing the calculation of Value at Risk (VaR) and Expected Shortfall (ES) for sample trading book positions using standard methodologies

Day — 5 Operational and Liquidity Risk

• Discussing the underlying causes and serious consequences of operational risks in banking organisations
• Understanding BCBS classifications of operational risk and the framework for categorising operational loss events
• Exploring the approaches available for measuring operational risk capital requirements, including:
  • The Basic Indicator Approach (BIA)
  • The Standardized Approach (SA)
  • The Advanced Models Approach (AMA)
• Defining liquidity risks and exploring the liquidity monitoring tools that banks use to manage intraday and term liquidity
• Understanding the calculation of the Liquidity Coverage Ratio (LCR) and its role in ensuring short-term resilience
• Exploring the components of the Net Stable Funding Ratio (NSFR) framework, including:
  • Available Stable Funding (ASF)
  • Required Stable Funding (RSF)
• Exercise: Practicing the computation of capital requirements using the Standardized Approach, and calculating both LCR and NSFR for realistic bank scenarios
• Course Evaluation & Lessons Learned: Consolidating essential learning outcomes, reflecting on practical applications, and gathering structured feedback on overall course effectiveness

Post-Course

• Three (3) x hour-long Executive Coaching sessions at monthly intervals following Course Completion

Learning Outcomes

By the end of this course, you will be able to implement a successful strategy that enables you to:

• Identify and understand key characteristics of great leadership.
• Develop behaviours and habits that build credibility and influence.
• Analyse and evaluate leadership styles using real-world benchmarks.
• Recognise core traits that enable effective leadership in complex environments.
• Cultivate and apply growth-oriented mindsets.
• Adapt leadership behaviours through cognitive flexibility.
• Implement strategies to maintain leadership stability.
• Recognise and manage personal leadership triggers.
• Use techniques to sustain focus and clarity under pressure.
• Strengthen key dimensions of executive presence: credibility, clarity, and composure.
• Ensure alignment between self-perception and external signals of leadership.
• Utilise verbal and non-verbal techniques to enhance leadership impact.