Basel III Capital Adequacy and Liquidity Risk Training Course

Course overview

Bank capital and liquidity decisions must withstand scrutiny from regulators, boards, treasury committees and internal risk functions. Professionals working with prudential metrics need to understand not only the headline ratios, but also the data, assumptions and risk drivers behind them. This course addresses the practical challenge of interpreting Basel III requirements, calculating capital adequacy and liquidity measures, and explaining how portfolio changes, funding structures and stress events affect regulatory positions.

Participants work through the Basel III capital framework, including CET1, Additional Tier 1, Tier 2, regulatory deductions, risk-weighted assets and capital buffers. They calculate Common Equity Tier 1, Total Capital, leverage and risk-weighted asset ratios using credit, market and operational risk inputs. The course also covers the Liquidity Coverage Ratio, Net Stable Funding Ratio, high-quality liquid assets, cash-flow maturity profiles, liquidity stress testing, ICAAP, ILAAP and the link between prudential reporting and management action.

Instruction combines focused faculty-led explanation with spreadsheet-based calculations, banking case studies and facilitated review of supervisory reporting scenarios. Participants build a Basel III capital and liquidity assessment workbook containing ratio calculations, a capital stack, RWA analysis, LCR and NSFR schedules, stress-test observations and recommended management actions. This provides a practical template that can be adapted to their institution's products, reporting cycle and governance process.

The course is suited to professionals moving into regulatory capital, finance, treasury, risk, balance-sheet management or prudential reporting roles, as well as managers who need a disciplined basis for reviewing Basel III metrics and escalation decisions.

Course objectives

By the end of this course, participants will be able to:

• Calculate CET1, Tier 1 and Total Capital ratios from a regulatory capital stack and risk-weighted asset data
• Classify capital instruments, regulatory adjustments and Basel III deductions within eligible own funds
• Apply standardised approaches to estimate credit, market and operational risk-weighted assets
• Construct a Liquidity Coverage Ratio schedule using high-quality liquid assets and 30-day net cash outflows
• Calculate the Net Stable Funding Ratio from available stable funding and required stable funding categories
• Interpret leverage ratio, capital conservation buffer and countercyclical buffer constraints for management decisions
• Perform a basic capital and liquidity stress test and identify likely recovery or remediation actions
• Prepare a Basel III capital and liquidity assessment workbook with ratio commentary and reporting controls

Benefits of attending

Target competencies

Who should attend

• Regulatory Reporting Analysts — who prepare or review capital, leverage and liquidity returns
• Bank Finance Professionals — who need to explain capital ratios, buffers and regulatory adjustments
• Treasury Analysts and Managers — who manage liquidity buffers, funding profiles and LCR or NSFR positions
• Risk Managers — who assess RWA drivers, stress-test impacts and prudential risk appetite
• ALM Professionals — who connect balance-sheet strategy with stable funding and liquidity requirements
• Internal Auditors and Compliance Officers — who test the governance, controls and evidence supporting Basel III reporting

Requirements and prerequisites

Participants should be comfortable reading a bank balance sheet, income statement and basic cash-flow information, and should understand percentage calculations, financial ratios and the broad distinction between assets, liabilities and equity. Familiarity with banking products such as loans, deposits, securities and derivatives is helpful. Participants should be able to use Microsoft Excel for formulas, filters and simple tables; no programming, regulatory reporting system access or prior Basel certification is required. This is a foundation-to-intermediate course: complete beginners can attend, but should expect to spend time becoming familiar with banking terminology and prudential acronyms.

Training methodology

Faculty-led sessions introduce each Basel III rule through bank balance-sheet examples before participants apply it in Microsoft Excel. Guided exercises cover capital-stack classification, RWA calculations, LCR and NSFR schedules, and the interpretation of ratio movements under changing lending, funding and market conditions. Small groups analyse a simulated bank facing capital and liquidity pressure, prepare an ALCO-style recommendation and challenge each other's assumptions. The final session consolidates individual action plans for applying the workbook, control checks and escalation logic in participants' own reporting or risk-management processes.

Course outline

Day 1: Basel III architecture and regulatory capital

• Basel III objectives, scope and the three-pillar framework
• Regulatory capital versus accounting equity
• Common Equity Tier 1 eligibility criteria
• Additional Tier 1 and Tier 2 capital instruments
• Prudential valuation adjustments and regulatory deductions
• Capital conservation and countercyclical buffer mechanics
• Capital stack presentation and minimum ratio requirements

Workshop: Participants classify a simulated bank's equity and debt instruments, apply deductions and produce a regulatory capital stack.

Day 2: Risk-weighted assets and capital adequacy

• Risk-weighted asset architecture and exposure classes
• Standardised approach for credit risk
• Credit risk mitigation through collateral and guarantees
• Off-balance-sheet credit conversion factors
• Market risk capital under the standardised approach
• Basel operational risk standardised measurement approach
• CET1, Tier 1, Total Capital and leverage ratio calculations

Workshop: Participants calculate RWA and capital adequacy ratios for a multi-product bank portfolio and explain the principal ratio drivers.

Day 3: Liquidity Coverage Ratio and short-term liquidity risk

• Liquidity risk sources in banking balance sheets
• Liquidity Coverage Ratio structure and minimum standard
• High-quality liquid asset eligibility and haircuts
• Operational deposits and deposit runoff assumptions
• Contractual inflows, inflow caps and committed facilities
• Thirty-day stressed cash-flow modelling
• LCR governance, limits and breach escalation

Workshop: Participants build a 30-day stressed cash-flow schedule, identify eligible HQLA and calculate an LCR for a retail and corporate bank.

Day 4: Stable funding, stress testing and internal adequacy

• Net Stable Funding Ratio purpose and calculation structure
• Available stable funding categories and weights
• Required stable funding categories and weights
• Maturity mismatch analysis and structural liquidity gaps
• Capital stress-testing scenarios and management buffers
• Liquidity stress testing and contingency funding plans
• ICAAP, ILAAP and risk appetite linkage

Workshop: Participants calculate NSFR, model a funding shock and draft capital and liquidity actions for an ALCO escalation paper.

Day 5: Reporting, governance and integrated Basel III decisions

• Basel III data lineage and reporting control points
• BCBS 239 principles for risk data aggregation
• COREP-style capital, leverage and liquidity reporting concepts
• Variance analysis for capital and liquidity ratio movements
• Interaction between capital planning, dividends and balance-sheet growth
• Management information for ALCO, risk committee and board reporting
• Supervisory review, remediation plans and evidence retention

Workshop: Participants complete an integrated Basel III assessment workbook and present a management recommendation based on capital, leverage, LCR, NSFR and stress-test results.

Tools & standards covered

Basel Framework (BCBS), BCBS 239 Principles, Microsoft Excel, EBA COREP Supervisory Reporting

A typical training day

Live online deliveries follow the same structure in the East Africa Time zone, with shorter screen blocks and longer breaks.

What the fee includes

How you can take this course

Certification

Participants who complete the full five days receive the Skillset Development Certificate of Completion, stating the course title, course code, dates and delivery format — suitable for professional-development records and employer reimbursement.

Frequently asked questions