Practical Examples of Model Risk Management

5/6/16 9:30 AM

In my last post, I reviewed the Model Risk Management guidance (AB 2013-07) set out by the Federal Housing Finance Agency (FHFA). This week, let’s consider examples of good and bad model governance in action. 

Read More

Topics: federal credit, model risk management

Model Governance Implications of FHFA Risk Management Bulletin AB 2013-07

4/22/16 9:00 AM

In my last post ("What Does the Guidance on Model Governance Say? A Closer Look at the New Supervisory Guidance from OCC/FRB"), I reviewed the guidance set out by the Office of the Comptroller of the Currency (OCC) and Federal Reserve Board (FRB). This guidance was adopted as OCC Bulletin 2011-12 and FRB SR 11-7, respectively. This week, we will explore a similar breakdown of Federal Housing Finance Agency (FHFA) Model Risk Management guidance AB 2013-07.

Read More

Topics: federal credit, model risk management

What Does the Guidance on Model Governance Say? A Closer Look at the New Supervisory Guidance from OCC/FRB

4/8/16 11:00 AM

In a recent post, "New Supervisory Guidance for Model Governance," I considered the lack of guidance specific to model governance by OMB and FASAB and how federal risk managers are instead turning to supervisory guidance. In the wake of the financial crisis, the Office of the Comptroller of the Currency (OCC) , Federal Reserve Board (FRB), and Federal Housing Finance Agency (FHFA) released new guidance for regulated financial institutions and FHFA’s “regulated entities.” Each document can be interpreted and tailored to federal risk managers as they govern their models.

In this post, I will take a closer look at the new supervisory guidance from OCC/FRB and FHFA and offer a deeper dive into governance framework issues.

Read More

Topics: federal credit, model risk management

New Supervisory Guidance for Model Governance

3/31/16 10:00 AM

In our last post, I considered how the Great Recession affected the culture of quantitative financial modeling. The downturn reminded us that quantitative models—and their brilliant designers—require oversight just like the rest of us. Governance is not a conspiracy by auditors and circular writers to make modelers miserable. Rather, good governance greatly increases the accuracy, reliability, and usability of a model. It also protects modelers from being left holding the bag if the model fails.

Read More

Topics: federal credit, model risk management

Why Is Model Governance Important in Federal Government Right Now?

3/11/16 2:20 PM

Despite its official end in 2009, the Great Recession still reverberates throughout the global economy. During and after the crisis, many people wondered how the downturn happened. Was it bad luck? Was it a systemic flaw? Was someone, somewhere to blame? And what could we do to prevent another one?

Read More

Topics: federal credit, model risk management

About the Summit Blog

Complexity simplified.

Summit is a specialized analytics advisory firm that guides clients as they decode their most complex analytical challenges. Our blog highlights the strategies and techniques we use, as well as relevant topics in current events.

Subscribe to Email Updates

Recent Posts