ILAAP, Stress Testing and Liquidity Risk Management Certification Training

This is a comprehensive professional program designed to deepen your understanding of liquidity risk, internal assessment frameworks and regulatory expectations under Basel-aligned supervisory regimes. This course focuses on the Internal Liquidity Adequacy Assessment Process (ILAAP) and equips learners with the skills to design, implement and evaluate effective liquidity risk management practices within financial institutions. It also covers key metrics such as the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR), asset-liability management (ALM) fundamentals, contingency funding planning and practical stress testing techniques relevant to liquidity risk. Using real-world scenarios, case studies and hands-on exercises, participants will gain the insights and tools needed to integrate liquidity risk frameworks into strategic decision-making, strengthen governance and meet evolving supervisory expectations.

Module 1 - Liquidity Risk Framework & Regulatory Environment

• Global liquidity-risk landscape under Basel III/IV
• Supervisory expectations for ILAAP (Pillar 2)
• Relationship between ILAAP, SREP, liquidity risk appetite and ALM
• Overview of regulatory metrics and reporting expectations
• Differences in regulatory approaches across jurisdictions



Module 2 - Constructing a Comprehensive ILAAP

• Objectives and core components of a compliant ILAAP
• Governance structure: Board, ALCO, senior management, independent review
• Defining liquidity risk appetite, risk drivers & internal limits
• Internal liquidity assessment processes
• Producing an ILAAP document: structure, evidence and regulatory requirements
• Interaction with ICAAP and overall risk governance



Module 3 - Liquidity Coverage Ratio (LCR)

• Purpose, components and mechanics of LCR
• HQLA (High-Quality Liquid Assets): eligibility, haircuts and operational requirements
• Net cash outflow calculations: behavioural assumptions & supervisory floors
• Strategies for managing and optimising LCR
• Practical LCR stress examples



Module 4 - Net Stable Funding Ratio (NSFR)

• NSFR structure: ASF, RSF and behavioural maturity dynamics
• Stable funding sources and structural funding strategies
• Business-model implications of NSFR
• Aligning funding strategy with NSFR optimisation



Module 5 - Interaction Between LCR, NSFR and Internal Metrics

• How LCR and NSFR interact under different stress and funding conditions
• Internal liquidity metrics (ILM, survival horizon, structural liquidity gap)
• Integrating regulatory and internal measures for strategic management



Module 6 - Balance Sheet, ALM & Funds Transfer Pricing

• Asset–Liability Management fundamentals for liquidity practitioners
• Behavioural modelling of deposits, optionality, early-withdrawal risk
• Repricing gaps, maturity gaps and liquidity risk channels
• Funds Transfer Pricing (FTP) frameworks
• Incorporating liquidity premiums into pricing and business strategy



Module 7 - Liquidity Risk Identification, Measurement & Modelling

• Liquidity-risk sources (contractual, behavioural, contingent, intraday)
• Gap analysis and cash-flow projections
• Concentration risk: funding, counterparty, product, currency
• Off-balance sheet liquidity exposures
• Liquidity Early-Warning Indicators (EWIs) & dashboards



Module 8 - Stress Testing for Liquidity Risk

• Principles of designing liquidity-risk stress tests
• Scenario types: idiosyncratic, market-wide, combined, systemic
• Cross-currency and cross-entity stress modelling
• Reverse stress testing
• Interactions with funding plans, liquidity buffers and collateral needs
• Regulatory expectations for stress-testing governance and validation



Module 9 - Contingency Funding Planning (CFP) & Recovery Triggers

• Purpose and components of a CFP
• Quantitative early-warning indicators and qualitative triggers
• Funding options under stress: feasibility and readiness assessment
• Playbooks and operational readiness
• Linking CFP with stress tests and ILAAP requirements



Module 10 Intraday Liquidity Risk Management

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• Regulatory expectations for intraday liquidity monitoring
• Real-time management of payment flows, collateral and liquidity sources
• Intraday stress testing and minimum liquidity buffers
• Interaction with LCR and operational liquidity policies



Module 11 - Liquidity Risk Reporting, Documentation and Supervisory Expectations

• Internal reporting: ALCO packs, dashboard metrics, KRIs
• Regulatory reporting: supervisory templates, typical findings, expectations
• Best-practice documentation for ILAAP submission
• Common regulatory weaknesses observed in ILAAP reviews



Module 12 - Case Studies and Practical Exercises

• Recent liquidity-stress case studies (deposit runs, market-wide events)
• Hands-on LCR/NSFR calculations
• Designing a simple liquidity stress test
• Creating a mini-CFP
• Interpreting liquidity gap reports & dashboards

• Basic understanding of banking, finance or treasury operations
• Familiarity with financial statements and balance-sheet management
• Prior exposure to risk management or asset–liability management (helpful but not required)
• No advanced regulatory or modelling experience required

• Liquidity risk and treasury professionals
• ALM, risk management and finance teams
• Regulatory reporting and compliance specialists
• Bank management involved in risk governance and strategy
• Internal audit and second-line risk oversight teams
• Anyone responsible for ILAAP preparation, stress testing or contingency funding planning

• 20 multiple-choice questions covering all course modules
• Passing requirement: at least 15 correct answers
• Two attempts allowed to achieve a passing score
• Certificate issued upon successful completion of the exam

Obtaining the ILAAP, Stress Testing, and Liquidity Risk Management Certification with training equips financial professionals with the critical skills needed to design, implement and assess liquidity risk management frameworks in line with regulatory requirements. This training teaches participants how to effectively conduct the Internal Liquidity Adequacy Assessment Process (ILAAP), perform stress tests to measure liquidity under adverse scenarios, and use liquidity risk metrics to ensure robust capital adequacy and financial stability. The course covers both theoretical and practical aspects, including stress testing methodologies, contingency funding plans and the impact of liquidity risk on a bank’s overall risk profile. Professionals such as risk managers, treasury analysts, liquidity specialists and compliance officers will benefit from gaining the tools necessary to enhance their organisation’s resilience to market shocks and regulatory scrutiny.

From a career and financial perspective, earning this certification with structured training boosts professional credibility, employability and earning potential. Organisations in the banking and financial sectors are increasingly seeking professionals who can navigate complex liquidity management and stress testing requirements while ensuring compliance with regulatory frameworks such as Basel III and European Banking Authority (EBA) guidelines. Certified professionals in liquidity and stress testing roles often see salaries ranging from $80,000 to $130,000, with more senior roles such as Chief Risk Officers or Treasury Heads exceeding $150,000, depending on the size and scope of the institution. By combining a respected certification with hands-on training, participants position themselves as valuable contributors to their organisation’s risk management strategy, while opening doors to higher-level positions in financial institutions and regulatory bodies.

A FRM and PRM certified Financial Risk Management Consultant with international expertise in risk management methodological frameworks. He brings over 25 years of experience advising financial institutions and organisations on effective risk management practices. Qualified in Islamic Finance (IFQ), he is a published author on risk management and Basel Accords and a regular speaker at industry conferences. In addition, he delivers training courses and workshops for professionals across the globe, helping participants strengthen their risk management knowledge and skills.

Learning Outcomes:

• Explain the structure, purpose, and regulatory context of the Internal Liquidity Adequacy Assessment Process (ILAAP) in banking institutions.
• Assess the global liquidity-risk landscape and the supervisory expectations under Basel III/IV and Pillar 2 frameworks.
• Construct a comprehensive ILAAP document, including governance, risk appetite, internal limits and linkage with overall risk frameworks.
• Calculate and interpret key liquidity risk metrics such as the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR), and develop strategies for optimization.
• Measure, monitor, and model liquidity risk exposures, incorporating behavioural modelling, gap analysis, and early-warning indicators.
• Design and execute effective liquidity stress tests using different scenario types, including reverse stress tests and combined stress conditions.
• Develop contingency funding plans (CFP) and operational readiness strategies for stress scenarios, integrating triggers and funding options.
• Apply best practices in liquidity risk reporting, documentation and supervisory interactions to support compliance and internal governance.