Regulatory AlertsSR 26-2: Revised Guidance on Model Risk Management
The Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation issued revised guidance on model risk management to supersede prior 2011 and 2021 directives. This update reflects fifteen years of supervisory experience and industry feedback, emphasizing a risk-based approach tailored to a banking organization's specific risk profile, size, and complexity. The guidance clarifies model risk management principles and recognizes that practices should vary among institutions based on their individual model usage and operational characteristics.
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