BASEL optional readings

[Kavita.bhangdia]

Hello everyone ,

for BASEL, GARP has specified two types of readings:

1. compulsary
2. optional

what is the purpose of optional readings? are they not going to be tested?
are they only for knowledge purpose?What is your strategy to deal with this.?

Please advice.

Thanks,
Kavita

 

[Delo]

I am also wondering the same. I have skipped "optional" readings completely.
Would like to know what are others doing..

 

[Deepak Chitnis]

Hi @Delo and @Kavita.bhangdia Please visit https://forum.bionicturtle.com/threads/basel-readings-how-to-cope-with-them.7484/#post-40545
Thank you

 

[Nicole Seaman]

Hello @Kavita.bhangdia and @Delo

The forum search function is very useful for these types of inquiries, as other members have posted questions about this before. @Deepak Chitnis posted a good link for you above. Here is another link where this is discussed: https://forum.bionicturtle.com/threads/basel-optional-readings.8564/#post-36558. I'm sure that searching the forum will also bring up other links for you

Thanks,

Nicole

 

[David Harper CFA FRM]

Thanks @Nicole Manley I noticed on your referenced thread a link to AF where somebody said called GARP and reported back "Just confirmed with GARP - those options sections are NOT going to be tested in exam. All other sections are fair play." That is the answer I'd expect, given the readings are "optional" and the syllabus already defines several (higher order) learning outcomes; the way I look at it: reviewing the "optional material" can only reinforce (ie, could not possible hurt except the opportunity cost of time, of course) an understanding of the formally included LOs, but would hardly be necessary. I think the optional readings are intended for practitioners who have a learning objective beyond the exam; i.e., job responsibilities. Thanks!

 

[Kavita.bhangdia]

Thanks everyone...that is a relief at least at this hour for me..

Regards,
Kavita

 

[msun09]

For sections Basel II: International Convergence, Basel III: A Global Regulatory Framework, and Basel III: The Liquidity Coverage Ratio in Module 3 Operational & Integrated Risk Management, are they still considered quite relevant for the upcoming exam? I see they have been labeled as optional reading in the learning Objectives. -- Thanks!

 

[Nicole Seaman]

For sections Basel II: International Convergence, Basel III: A Global Regulatory Framework, and Basel III: The Liquidity Coverage Ratio in Module 3 Operational & Integrated Risk Management, are they still considered quite relevant for the upcoming exam? I see they have been labeled as optional reading in the learning Objectives. -- Thanks!

Hello @msun09

Please note that I moved your question to this thread, which discusses the optional regulatory readings.

Thank you,

Nicole

 

[David Harper CFA FRM]

@msun09 Last year I sent an email to our GARP contact (Bill) specifically about the optional readings; I wrote:

The Basel "Optional Regulatory Readings" are challenging because (i) there are hundreds of pages yet (ii) there exist no associated learning objectives. We are thinking about drafting our own learning objectives for the source Basel readings, because candidates need guidance. The drawback to massive yet optional reading assignments is that some candidates don't know what to do (and Basel can be a huge time trap for those who dive deep).

Do you have any thoughts about that? Or more specifically, are the 2018 LOs likely to repeat the current approach of assigning BIS readings (currently, six) and designating them optional but without any LO guidance? Thanks!

His reply was:

David,

I’m not sure I completely understand the issue. The assigned readings (BIS or otherwise) all have meaningful LOBs associated with them. Between the assigned readings and all of optional reference readings, in the Study Guide as well as the Learning Objectives document, is the following:

Optional Regulatory Readings for Reference
Candidates are expected to understand the objective and general structure of important international regulatory frameworks and general application of the various approaches for calculating minimum capital requirements, as described in the readings above. Candidates interested in the complete regulatory framework can review the following:


The intention is to delineate between what is expected and what is provided as reference for the interested/motivated candidate.
Do you feel that the explanation is not clear? Are you sensing that your customers do not understand that the optional readings are optional?

Bill

... in case this is helpful. I still believe the Basel reading assignments are too loose; i.e., it's hard for candidates to know exactly how much time to spend and it seems like it could be easy to over-prepare. Although not directly under optional readings, more recently, my feedback to GARP echoed @sharman.jamie 's observation about Question 10: it seems like too much to ask candidates to memorize the BI component formulas for each bucket, yet the practice question asks for this per LO "calculate the operational risk capital requirement for a bank using the SMA."

Thanks,

 

[oryan5000]

In the GARP study guide for the Basel readings in the Opertional Risk section of part 2, it reads:

"Candidates are expected to understand the objective and general structure of important international regulatory frameworks and general application of the various approaches for calculating minimum capital requirements, as described in the readings above. Candidates interested in the complete regulatory framework can review the following"

It then goes on to list 7 Basel readings. So can these safely be skipped without lowering my chance of passing? Thanks

 

[David Harper CFA FRM]

Hi @oryan5000 I moved your question to here (thankfully we have a tag https://forum.bionicturtle.com/tags/basel-optional-readings/). This appears to be our latest understanding (see above by Bill May @ GARP).

@Nicole Seaman I think this is our best understanding? That is, if the question is "With respect to passing the exam, can the optional Basel readings be skipped?" the answer is yes, they can be skipped.

If we need to re-affirm with Lisa, we can do that ... but I think they've been pretty consistent (at least as of now, mid 2019). Thanks,

 

[oryan5000]

@David Harper CFA FRM Awesome, thank you for the quick feedback! Are there any other optional readings in FRM Part 2 aside from those?

 

[David Harper CFA FRM]

Hi @oryan5000 Sure thing! No, these are the only "optional" readings in Part 2. I'm quite sure because their optional status has been a bit of a burr under our saddle for years; despite the qualifying text (caveat), the fact they are itemized in the Guide/LO documents causes some candidates every year to think maybe they sort of "should" read them ... thanks!

 

[Susanna3890]

Hello all,

in the BT study notes i see some optional readings regarding Basel regulation in the OpRisk session. Were they actually ever asked?

 

[David Harper CFA FRM]

Hi @Susanna3890 according to GARP, the FRM exam itself will not (i.e., should not) ask questions directly about the Optional Basel readings. I hope that's helpful,