1. Course Overview

This program equips banking supervisors, regulators, and financial sector analysts with the tools and frameworks required to implement risk‑focused supervision (RFS)—a supervisory approach that prioritizes resources toward institutions and activities posing the greatest risks to financial stability.

The course aligns with the Basel Core Principles (BCPs), World Bank Financial Sector Assessment Program (FSAP) methodologies, and global best practices for risk identification, risk scoring, supervisory planning, and intervention.

2. Learning Objectives

Participants will be able to:

• Understand the principles and objectives of risk‑focused supervision.

• Identify, assess, and prioritize risks across banking institutions.

• Apply risk‑based supervisory tools and methodologies.

• Conduct on‑site and off‑site risk assessments.

• Evaluate governance, internal controls, and risk‑management frameworks.

• Develop supervisory risk ratings and action plans.

• Strengthen early‑warning systems and supervisory dashboards.

• Prepare supervisory reports aligned with World Bank and Basel standards.

3. Target Audience

• Central bank supervisors and regulators

• Financial Services Regulatory Authorities

• Risk and compliance officers

• World Bank–funded financial sector reform teams

• Banking sector analysts and consultants

• Auditors and oversight institutions

• Researchers and academics in financial regulation

4. Detailed Course Outline

Module 1: Introduction to Risk‑Focused Supervision

• Evolution from compliance‑based to risk‑focused supervision

• Objectives and benefits of RFS

• World Bank and Basel Committee perspectives

• Key components of a risk‑focused supervisory framework

• Case studies of supervisory failures and lessons learned

Module 2: Basel Core Principles (BCPs) and Risk‑Based Supervision

• Overview of relevant Basel Core Principles

• Supervisory independence, powers, and responsibilities

• Governance, risk management, and internal controls

• Linking BCP assessments to risk‑focused supervision

• FSAP findings and global supervisory trends

Module 3: Risk Identification Frameworks

• Types of risks: credit, market, liquidity, operational, interest rate, FX, cyber, AML/CFT

• Emerging risks: fintech, climate, digital assets

• Tools for identifying inherent risks

• Understanding business models and risk drivers

• Sector‑wide and institution‑specific risk mapping

Module 4: Risk Assessment & Scoring Methodologies

• Assessing inherent risk vs. control effectiveness

• Risk scoring matrices and heat maps

• Evaluating governance, risk culture, and internal audit

• Quantitative and qualitative risk indicators

• Developing institution‑specific risk profiles

Module 5: Off‑Site Supervision & Early Warning Systems

• Off‑site monitoring tools and templates

• Financial analysis: capital, asset quality, earnings, liquidity, sensitivity (CAMELS)

• Early warning indicators and triggers

• Supervisory dashboards and data analytics

• Reporting requirements and supervisory follow‑up

Module 6: On‑Site Risk‑Focused Examinations

• Planning and scoping on‑site inspections

• Conducting targeted risk reviews

• Evaluating credit risk management, market risk controls, and operational resilience

• Interviewing management and reviewing internal documents

• Documenting findings and supervisory judgments

Module 7: Supervisory Review & Intervention (SREP)

• Supervisory Review and Evaluation Process (SREP)

• Assessing ICAAP and risk‑management frameworks

• Determining supervisory ratings and risk levels

• Designing supervisory action plans and remedial measures

• Escalation, enforcement, and sanctions

Module 8: Macro‑Prudential Risk Assessment

• Systemic risk indicators and monitoring

• Stress testing and scenario analysis

• Sector‑wide risk assessments

• Macro‑prudential tools and interventions

• Coordination between micro‑ and macro‑prudential supervision

Module 9: Supervisory Governance, Reporting & Communication

• Supervisory governance structures

• Internal quality assurance and peer review

• Writing effective supervisory reports

• Communicating findings to banks and stakeholders

• Transparency and accountability in supervision

Module 10: Practical Exercises & Capstone Project

• Conducting a full risk assessment for a simulated bank

• Developing a supervisory risk rating and action plan

• Designing an early‑warning dashboard

• Preparing a supervisory examination report

• Capstone: Build a complete Risk‑Focused Supervision Plan for a simulated financial system

5. Training Methodology

• Expert‑led lectures and guided discussions

• Hands‑on risk assessment and scoring exercises

• Case studies from World Bank and IMF FSAP missions

• Group work and scenario‑based simulations

• Practical sessions on supervisory dashboards and risk tools

• Capstone project with peer and instructor feedback

6. Deliverables & Outputs

Participants will receive:

• A Risk‑Focused Supervision Toolkit (frameworks, templates, checklists)

• Risk scoring and early‑warning system templates

• Sample supervisory reports and action plans

• Capstone project report and presentation

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