Regulatory AlertsRecommendation W on Model Risk Management in Banks
The Polish Financial Supervision Authority issued Recommendation W to establish comprehensive standards for model risk management in banks, requiring a systematic approach to identify, measure, and control risks associated with internal and external models. The document mandates the implementation of a model risk policy, the establishment of independent validation units for significant models, and the maintenance of a model register and audit trails throughout the model lifecycle. Banks are expected to fully implement these recommendations by June 30, 2016, ensuring that governance structures and resources are proportionate to the significance and risk exposure of the models used.
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