Regulatory Alerts2024-08-21
Management of Model Risk
The Supervisor of Banks issued this directive to establish comprehensive requirements for the management of model risk within banking corporations. It mandates robust corporate governance, rigorous model development and validation processes, and specific controls for artificial intelligence models to mitigate potential financial and reputational harms. The framework applies to all banking entities, requiring them to implement policies that ensure accurate model usage, independent challenge, and clear accountability across the organization.
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