Model risk management programs provide a framework for financial services organizations to make informed decisions on various business practices using quantitative analysis. The outcomes from these models help predict performance and mitigate risks associated with a variety of business activities.
In the current regulatory environment, it is important for financial services organizations to review their policies on risk modeling to ensure they are capturing the appropriate market forces that can impact their business. BAI has put together a document on Model Risk Management Program considerations to help financial services organizations know what they need to include in their policies and to make sure information is being reported on factually. Key components of the document include:
Are you looking to learn more about properly implementing or updating your policies on Model Risk Management? Download BAI’s: “Model Risk Management Program Policy Considerations.”