A major advancement in risk management among large financial institutions has been the development of internal risk models. The models encompass institutions’ procedures and techniques for assessing ...

There are two main methods of calculating the solvency capital requirement (SCR) under Solvency II, the “standard formula” and “internal model” methods: (a) The standard formula method, as its name ...

Model risk management is entering a period of rapid transformation as institutions integrate increasingly complex AI, ML, and GenAI models into their inventories. Traditional validation approaches are ...

The PRA’s new supervisory statement extends banks’ model risk management obligations “across all models” - not just capital and stress testing. What steps must banks take to comply? Despite last ...

Against a background of increasing reliance on models and scenario analysis to assess future risks, the UK’s bank regulator, the Prudential Regulation Authority (“PRA”), has published a supervisory ...

The internal-ratings based approach for banks to quantify capital for credit risk – a framework deployed by over 100 banks, from Europe to China and Australia – is in crisis. While the Fed has been ...

Does your board really care about model risk? Not in the abstract, or in carefully scripted assurances that governance is robust and controls are strong. The better question is whether the board, and ...

Modern model risk management startup Ethos AI Inc. announced today that it has raised $6 million in new funding to expand its engineering team, enhance its go-to-market efforts and strengthen its ...

Effective risk attribution should be directly aligned with the underlying investment process to ensure relevance and actionable insights. Our research demonstrates how risk attribution can be aligned ...

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