New approaches to model risk governance

Brian Gregory

Journal of Risk Management in Financial Institutions, 2018, vol. 11, issue 4, 296-300

Abstract: Financial models are woven into the fabric of the financial services industry. Whether they are being used to evaluate the best use of capital or measure current risks, modelling informs a broad range of decisions in this sector. Failure to manage the models can result in significant losses. This paper looks at what the risks are and what the key elements required to manage the risk are. What the regulators have stated as the requirements, together with strategies to meet them, are reviewed. Also, the need for a centralised and standardised approach to model risk governance and the crucial role that the operational risk team should play is proposed.

Keywords: model risk governance; operational risk; senior managers personally responsible; SR11-7 (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:aza:rmfi00:y:2018:v:11:i:4:p:296-300

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