Dates: 19 – 22 May 2025                                      

Duration: 4 Days                             

Venue: Virtual                                 

Languages: English/Portuguese                           

Background 

Risk budgeting is a framework that reflects an institution’s risk appetite that will enable it to achieve its return objectives. It gives insight into how risk is allocated across investments and therefore facilitates assessing the return per unit of risk of investments. At a portfolio level, it helps to assess the attractiveness of different investment opportunities in terms of assets, markets, and strategies.  It is a good planning tool for reserves managers since it informs decisions on how to position the portfolios to improve performance and control portfolio risk.

Effective corporate governance is underpinned by a robust risk management framework. As institutions strive to anticipate and mitigate financial and business risks, instituting effective internal controls that are frequently reviewed through internal audit prevents undesirable outcomes. The internal audit function provides assurance to the board that risk management processes and controls are effective, in relation to an institutions risk appetite. It also provides insights to senior management on how to continuously improve internal processes and strengthen controls. Risk based auditing places emphasis on those areas where potential impact is most significant and therefore seeks to address the highest priority risks.

On the one hand, a risk budget dictates how much risk an institution is willing to take to achieve its objectives while risk-based auditing determines where audit efforts should be concentrated, based on the level of risk. Therefore, a risk budget can be used as a tool to aid auditors to allocate their time and resources to areas in reserves management with the highest potential impact.

MEFMI will conduct a workshop to equip participants with knowledge on the concepts, models, techniques and systems for risk budgeting and risk based auditing of sovereign asset reserves portfolios.
 

Objectives

1. To enlighten participants on risk budgeting and risk based auditing of reserves portfolios
2. To impart knowledge on allocating risk budgets in portfolio management
3. Enhance understanding of monitoring, measuring, and evaluating financial risks.
4. To enlighten participants of the benefits for Risk Budgeting and Risk Based Auditing
5. Discuss systems for Risk Based Auditing

Course Content

1. Risk Budgeting and Institutional Risk Tolerance
2. Financial Risks
3. Risk Budgeting Models and Risk Based Auditing Techniques
4. Risk Based Auditing Vs Traditional Audit Approach
5. Benefits of Risk Based Auditing
6. Systems for Risk Based Auditing

Target Group

The target group includes junior and mid-level portfolio managers, risk and performance analysts from in the front and middle offices, internal auditors who audit reserves operations, and compliance officers from Central Banks, Deposit Insurance Funds, Public Pension Funds and Sovereign Wealth Funds.