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Partners in Risk Management

Observations on Model Risk

Posted on Jul 20, 2016

We have revised and updated our report “Observations on Model Risk”, a benchmark survey of 54 financial institutions carried out by Fintegral and the IACPM.

Key points:

  • While SR11-7 has emerged as a global standard for model risk management (MRM), there are pronounced differences in how institutions approach it according to size and regulatory environment
  • European regulators have begun to scrutinise governance frameworks more closely, but remain less prescriptive than the US in this regard
  • Banks are searching for a standardised approach to aggregating model risk
  • The goal is an effective model risk framework across all four lines of defence that ensures the inclusion of all relevant risks and provides consistent quality across the entire financial sector.

Click here to view the report in full Observations on Model Risk

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