Inflation is one of the single most powerful forces confronting professional investors, and among the most difficult to manage. This course is designed to consider the potential impacts of changes in inflation and what this is likely to mean for a financial institution. It will consider the measurement of inflation risk and provide some detail regarding the tools and risk management techniques that can be used with for hedging portfolios against the negative impact of inflation and protecting assets.
To understand different ways in which banks and other financial institutions suffer inflation risk. It will also consider how portfolios and investments can be protected against inflation through the use of inflation linked products. Also how to understand effective inflation protection vehicles, along with strategies for integrating them into diversified professional portfolios.
Session 1: What Is Inflation and how is it measured?
- The current environment
- Measures of inflation
- Key drivers and impacts
- The future expectations
- The consequences of inflation
- What yield curves tell you
- How yield curves have changed
- Different measures of inflation
- Is inflation risk different from inflation?
- Is inflation a bad thing?
- Who benefits and who loses from inflation
- Should we be concerned about deflation?
Session 2: Identifying Inflation Risk
- Where does a bank suffer Inflation risk?
- How does inflation risk sit within enterprise risk management
- The impact on risk appetite
- Developing warning signs and indicators
- Measuring uncertainty
- The impact on credit analysis and assessment
- The impact on modelling techniques
- Considering stress testing and scenario modelling
- The relationship to the ICAAP
Session 3: Historical Relationships between Interest Rates and Inflation
- Learning from the past
- Identifying responses
- Recognising political risk impacts
- Understanding impacts on markets
- Recognising capital market changes
- Bond hedges
Session 4: Inflation-Linked Bonds
- Nature and types
- Markets and the impact of regulation
- Description and returns
- Strategies for creating and optimizing portfolios of inflation-linked bonds
- Corporate inflation-linked bonds and inflation derivatives markets
Session 5: Risk Mitigation approaches
- Certainty v uncertainty
- Using derivatives to hedge inflation
- Key measures to address
- The nature of the instruments available
- How to measure the derivatives success
- Current contract designs and products, including futures and forwards
- The impact on commodities markets
- The role of actively managed commodity strategies along with structural sources of potential return
Session 6: The Impact on Asset Management and Treasury Assets
- The role of ALCO
- The impact on capital fund raising
- The changing shape of risk
- The impact on fixed income securities
- The historic role of gold
- The impact on strategic asset allocation and tactical asset allocation
- Potential trading strategies including bullion, gold-related stocks, exchange-traded funds, futures, options, and structured products
PROGRAMME DIRECTOR – DENNIS COX BSc BFP FCA FCSI
Dennis is the Chief Executive of Risk Reward Ltd, where he oversees all consulting and training projects. A UK Chartered Accountant and internationally recognized financial services risk management, compliance, internal audit and financial crime expert, he specializes in the interdisciplinary forward-looking impact of and opportunities of regulation, digital technologies, and the challenges surrounding credit, market, liquidity/treasury and operational risk, as well as successful compliance implementation techniques and model validation assessment, robustness and best practise.
He has more than 30 years of experience in the areas of risk, banking, financial crime, audit, and accounting having held senior management positions within the banking and accountancy profession as Head of Internal Investigations at HSBC Global Bank, Director, Risk Management at HSBC Insurance Brokers Limited, and Director, Risk Management, Prudential Portfolio Managers. Formerly he held a number of roles within the audit profession, including Senior Audit Manager (Compliance) at HSBC Holdings PLC and Senior Manager (Banking and Finance) at both BDO Binder Hamlyn and Arthur Young (now Arthur Anderson and Ernst & Young),
Since 2002 regional and national regulators and banks and financial institutions (traditional and Islamic) worldwide have benefited from the regulatory, technical and behavioural guidance and training afforded by Mr Cox directly and via well-established and trusted third parties.
He is a Fellow, Co-founder and Chairman of the Risk Forum for the UK Chartered Securities and Investment Institute and administers the Risk Reward Global Risk Forum on LinkedIn. A Fellow of the Institute of Chartered Accountants (FCA), he has also been a National Council Member for 17 years and a representative of the public as Council Member of the Institute of Actuaries (Insurance) for 10 years. He teaches the Global Financial Compliance; Combatting Final Crime and the Conduct Risk courses as examination preparation for certification by the CISI.
He holds an honours degree in Mathematics from the London University Westfield College.
A much in-demand speaker and trainer known for his highly-interactive, practical, job-role approaches, ease of communicating complex topics into an enjoyable social learning experience with wit and personal attention to delegates, Mr. Cox is the author of An Introduction to Money Laundering Deterrence and The International Handbook of Money Laundering Deterrence, and Banking and Finance: Accounts, Audit and Practice, He is the co-author of The Mathematics of Banking & Finance and is the senior editor and author of several chapters in The Frontiers of Risk Management.
Virtual Classroom via Cisco WebEx
Experience the highly-interactive expert-led social learning through Virtual Classroom via Cisco WebEx from Nolwazi Africa..
All our 2022 Virtual Classroom events feature shared (or discrete) live chat between delegates and the expert, participate in topical surveys, polling questions, group exercises and case studies for a tried -and- true engaging and gratifying learning experience.
Need to bring this course in-house or face-to-face? Simply contact us for significant cost savings and dates best suited to meet your professional development and business goals.
To register, please download the PDF & complete the form on the last page. Fax it to 086 570 8986. Or please contact us on +44 7596816855 for further information.