I am becoming increasingly convinced that one of the most under-managed areas of risk management is model risk. Often when I see risk managers at bank conferences I pose the question, “Do you have a completed inventory of all key models used for decision making, including risk ratings and validation schedules?” This is always an … Continue reading
Every iinstitution makes extensive use of analytic models to support everyday business decisions. But in the course of building, deploying and using these models, the institution must accept a certain amount of risk. The OCC in its supervisory guidance defines “Model Risk” as “the potential for adverse consequences from decisions based on incorrect or misused … Continue reading
Operational risk management is, at the end of day, about perpetual improvement. It really has very little to do with calculations, or formulas or models – it’s about identifying risk, analyzing it, aligning it to within acceptable tolerance levels and monitoring it. Ironically one of the richest sources of data that can be mined for … Continue reading
Within any given organization there are an almost infinite number of ways to structure departments and divisions. Depending on the industry, company type, geography, management style and other factors, a company can legitimately and logically be organized in any number of ways. Some companies prefer flat management structures, some classic hierarchical. However, regardless of how … Continue reading
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