"Excellent course, providing new insights."
Director,
ABN AMRO Bank
Netherlands


Risk Culture & Behavioral Risk Management
Psychological skills to complement quantitative methods
Overview

Virtually every major risk management catastrophe in recent years – including the global financial crisis of 2008 - has psychological pitfalls at its root. The list of catastrophes includes rogue trading scandals, Ponzi schemes, the nuclear meltdown at Fukushima Daiichi power plant, and the 2010 explosion at BP’s Macondo well in the Gulf of Mexico. Although all of these catastrophes featured problematic quantitative frameworks, it was human psychology rather than problematic modeling that served as the key driver. Despite this fact, risk management education continues to overemphasize quantitative modeling and underemphasize psychological understanding.

If you are responsible for risk management or wish to have a better awareness of risks within your organization, if you interact with risk managers, or if you are a risk manager yourself,  then this program will help you better understand the psychology of risk. At its core, the psychology of risk pertains to emotions, framing, personality, and judgmental errors. Through this program, you will acquire a vocabulary and skill set for analyzing the psychological dimension of risk management issues, thereby improving your effectiveness and the efficacy of your organization.

How you will benefit
  • Learn to identify how psychological hard wiring predisposes people to make systematic mistakes in the assessment and taking of risk
  • Be able to assess and describe how  risk management culture determines levels of operational risk
  • Measure the reflection of sentiment in pricing and its connection to value and risk
  • Understand how behavioral frameworks can be used to foster a risk management mindset for all professionals within the organization 
  • Build a behavioral toolkit through the use of case studies during the program
 

Program preparation (approximately 1 day) - mandatory

Preparation for the program includes pre-reading and completion of an extensive multiple choice questionnaire regarding the participant's attitudes toward risk, saving, and investment.  Completing the questionnaire is an experience which leads participants to be consciously aware of their own attitudes, thereby forming the basis for reflection, comparison and taking action. The results of the questionnaire form the core of the program, making it crucial that each participant complete the questionnaire within the given time frame. Completion of the questionnaire is mandatory. Enrolled participants not completing the questionnaire before the deadline will be excluded from attending the program.

 

 

Content

PRE-COURSE PREPARATION (approximately 1 day of self-study)

  • Extensive pre-reading (distributed 2 -3 weeks prior to the start date)
  • Completion of an extensive questionnaire regarding the participant's attitudes toward risk, saving, and investment. The results form the core of the program, making it crucial that each participant completes the questionnaire within the given deadline.

 

PROGRAM CONTENT

Psychological foundations: vocabulary, concepts, and techniques

  • Heuristics
  • Biases
  • Framing effects and reference-point risk preferences

 

Financial instability, systemic risk, psychological dimension of global financial crisis

  • Financial Instability Hypothesis
  • Systemic risk
  • Global financial crisis, case studies
  • Regulatory heuristics


Risk management in financial firms and regulatory agencies: case studies

  • JPMorgan Chase, OCC
  • MF Global, CFTC/SEC
  • RBS, Fortis, Santander/ABN AMRO, FSA/DNB
  • Madoff, SEC

 

Risk management in operating firms and regulatory agencies: case studies

  • Fukushima Daiichi, NISA
  • Southwest Airlines, FAA
  • BP, MMS
  • GM, NHTSA
 

 

Who should attend

If you are responsible for risk management or  wish to have a better awareness of risks within your organization; if you interact with risk managers, or if you are a risk manager yourself,  then this program will help you better understand the psychology of risk.

 

Interested in this program?
Then maybe this program would also be of interest to you:

> Behavioral Finance

Faculty
Hersh Shefrin 

Hersh Shefrin is the Mario L. Belotti Professor of Finance at Santa Clara University. He is one of the pioneers in the behavioral approach to economics and finance. The January 2001 issue of CFO magazine listed him among the academic stars of finance. A 2003 article in the American Economic Review listed him as one of the top fifteen economic theorists to have influenced empirical work. In 2009, his behavioral finance book Beyond Greed and Fear was recognized by J.P. Morgan Chase as one of the top ten books published since 2000. His most recent book, Behavioral Risk Management, was published in 2016. 

>> Read his full biography

 

Accreditation

CFA Institute - CE credit hours
Amsterdam Institute of Finance is registered with CFA Institute as an Approved Provider of continuing education programs. This program is eligible for 12 CE credit hours as granted by CFA Institute. If you are a CFA Institute member, CE credit for your attendance at this event will be automatically recorded in your CE Diary.
CFA Institute_CE Qualified Activity

 

VBA - PE points
The VBA in the Netherlands is the association for investment professionals and their customers.  For members of the VBA, this program has been granted 16 PE points as part of their continuing education (PE - Permanente Educatie) program.

VBA 16 PE


Dates & fees
Dates to be advised € 2,500
Contact us to be informed of dates as soon as they are available info@aif.nl

Program fee includes all study materials, books and software that are required for the program as well as daily luncheons.
Program fee is exempt from VAT for clients located in the Netherlands. For other EU and Non-EU clients, VAT may be due by client and will not be charged by AIF. Fees may be subject to change.
Testimonials

“Up to date, relevant and interesting. Straight forward delivery of complex topics”
Management Board Member / CFO
Croatia Banka PLC
Croatia

 

“Excellent course, providing new insights.”
Director
ABN AMRO Bank

The Netherlands

 

“I would recommend this program because of the challenging nature and the fact that psychology is relevant to all of us.”
Chief Compliance Officer
Schretlen & Co
The Netherlands

 

“Relevant for application in a risk management function.”
Enterprise Risk Manager
ABN AMRO Bank
The Netherlands

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