Although the Federal Reserve Board and the Office of the Comptroller of the Currency issued model risk management guidance for financial institutions in 2011, the subject is still in relative infancy at many financial institutions. The process of measuring risk in the quantitative models that bankers employ to help manage credit, underwriting, anti-money laundering, and other functions has been only a theoretical exercise in many financial institutions, often limited to the initial development of model risk policies. However, regulators now expect bankers to move from policy to practice by implementing formal processes and procedures that can help them mitigate the risk inherent in their models.
This webinar will:
- Provide an overview of model risk management guidance;
- Outline five steps financial institutions can use to meet regulatory expectations;
- Discuss best practices in model risk management.