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STAT4606 Risk management and Basel Accords in banking and finance (6 credits) Academic Year 2025
Offering Department SCDS (Department of Statistics and Actuarial Science) Quota ---
Course Co-ordinator TBC, SCDS (Department of Statistics and Actuarial Science) < ugenq@hku.hk >
Teachers Involved
Course Objectives To provide comprehensive knowledge and in-depth understanding of risk management in the banking and finance industry to students. The focus is on management with basic measurement fundamentals only forming a part of the course. Accordingly, minimal background in quantitative methods will be required and involved.  However, basic financial product (eg: bonds, swaps, options) knowledge will be required.
Course Contents & Topics The course introduces and explains:
- the importance of risk management,
- risk nature and types,
- design and establishment of a risk management framework,
- the importance of people and corporate culture,
- the complete risk management cycle,
- measurement and management of credit, market and operational risks,
- Basel accords and the capital treatments for credit, market and operational risks,
- key developments (eg: Know-Your-Customers, Anti-Money laundering, Sarbanes-Oxley) and critical issues,
- the importance of business continuity,
- design and implementation of a business continuity plan.
Course Learning Outcomes
On successful completion of this course, students should be able to:

CLO 1 understand the importance, nature and classification of various risks, and the risk management principle and cycle
CLO 2 design and establish a risk management framework
CLO 3 demonstrate knowledge and understanding of the measurements of credit, market and operational risks
CLO 4 explain and describe Basel accords and its capital treatments for credit, market and operational risks
CLO 5 appreciate the importance of, design and implement a business continuity plan
Pre-requisites
(and Co-requisites and
Impermissible combinations)		 Pass in STAT3618 or STAT3910 or STAT3905 or (FINA2322 and any University level 3 course)
Only for students admitted in 2024-25 or before.
Course Status with Related Major/Minor /Professional Core 2U000C00 Course not offered under any Major/Minor/Professional core
2024 Major in Risk Management ( Disciplinary Elective )
2024 Minor in Risk Management ( Disciplinary Elective )
2023 Major in Risk Management ( Disciplinary Elective )
2023 Minor in Risk Management ( Disciplinary Elective )
2022 Major in Risk Management ( Disciplinary Elective )
2022 Minor in Risk Management ( Disciplinary Elective )
2021 Major in Risk Management ( Disciplinary Elective )
2021 Minor in Risk Management ( Disciplinary Elective )
Course to PLO Mapping 2024 Major in Risk Management < PLO 1,2,3,4,5,6 >
2023 Major in Risk Management < PLO 1,2,3,4,5,6 >
2022 Major in Risk Management < PLO 1,2,3,4,5,6 >
2021 Major in Risk Management < PLO 1,2,3,4,5,6 >
Offer in 2025 - 2026 N        Examination
Offer in 2026 - 2027 N
Course Grade A+ to F
Grade Descriptors
A Demonstrate thorough mastery at an advanced level of extensive knowledge and skills required for attaining all the course learning outcomes. Show strong analytical and critical abilities and logical thinking, with evidence of original thought, and ability to apply knowledge to a wide range of complex, familiar and unfamiliar situations. Apply highly effective organizational and presentational skills.
B Demonstrate substantial command of a broad range of knowledge and skills required for attaining at least most of the course learning outcomes. Show evidence of analytical and critical abilities and logical thinking, and ability to apply knowledge to familiar and some unfamiliar situations. Apply effective organizational and presentational skills.
C Demonstrate general but incomplete command of knowledge and skills required for attaining most of the course learning outcomes. Show evidence of some analytical and critical abilities and logical thinking, and ability to apply knowledge to most familiar situations. Apply moderately effective organizational and presentational skills.
D Demonstrate partial but limited command of knowledge and skills required for attaining some of the course learning outcomes. Show evidence of some coherent and logical thinking, but with limited analytical and critical abilities. Show limited ability to apply knowledge to solve problems. Apply limited or barely effective organizational and presentational skills.
Fail Demonstrate little or no evidence of command of knowledge and skills required for attaining the course learning outcomes. Lack of analytical and critical abilities, logical and coherent thinking. Show very little or no ability to apply knowledge to solve problems. Organization and presentational skills are minimally effective or ineffective.
Communication-intensive Course N
Course Type Lecture-based course
Course Teaching
& Learning Activities
Activities Details No. of Hours
Lectures 36.0
Tutorials 12.0
Reading / Self study 100.0
Assessment Methods
and Weighting
Methods Details Weighting in final
course grade (%)		 Assessment Methods
to CLO Mapping
Assignments Coursework (assignments, tutorials, and a class test) 40.0 1,2,3,4
Examination One 2-hour written examination 60.0 1,2,3,4,5
Required/recommended reading
and online materials		 Crouhy, M., Galai, D. and Mark, R.: The Essentials of Risk Management (McGraw-Hill, 2006)
Jorion, P.: Financial Risk Manager Handbook + Test Bank: FRM part I/Part II (Wiley, 2010, 6th edition)
Hull, J. C.: Risk Management and Financial Institutions (Pearson Higher Education, 2010, 2nd edition)
Gallati, R.: Risk Management and Capital Adequacy (McGrawHill, 2003)
Course Website http://moodle.hku.hk
Additional Course Information This course is previously called STAT2320 as the prerequisite changed to STAT3303.


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