Resource Will Help Banks Optimize the Opportunities and Limit the Risks of Models
Philadelphia, Pa (November 10, 2020) –
The Risk Management Association’s (RMA) Model Validation Consortium (MVC) has created a resource for small and medium-size banks that want to fully capitalize on the benefits of models while also managing models’ considerable risk.
RMA’s “Model Risk Framework for Medium-Size and Small Banks” details the key components of a sound model risk management framework (MRM), with a focus on institutions where the struggles to launch a solid MRM program are distinct from those of a national or multinational bank.
The Framework is a guide to:
- Developing a model inventory.
- The model development process.
- Model validation.
- Running an ongoing model monitoring program.
- Creating a risk appetite statement.
“The Framework provides checklists, questions to ask throughout the process, and information on model risk management roles and responsibilities at a financial institution,” said RMA Director of Credit Risk Fran Garritt. “It is a valuable and convenient guide to not only starting up a model risk management program but ensuring its continued success as well.”
“RMA is pleased to provide a resource that will help more members tap the power of models while also mitigating their risk,” said Steven Martin, RMA’s Director of Business Solutions. “RMA’s ‘Model Risk Framework for Medium-Size and Small Banks’ is key to developing a sound, cost-efficient model risk management framework that is appropriately scaled for the institution.”
RMA’s “Model Risk Management Framework” is available to members here. To learn more about RMA’s MVC, click here.
Founded in 1914, the Risk Management Association is a not-for-profit, member-driven professional association whose sole purpose is to advance the use of sound risk management principles in the financial services industry. RMA promotes an enterprise approach to risk management that focuses on credit risk, market risk, and operational risk. Headquartered in Philadelphia, Pennsylvania, RMA has 1,900 institutional members that include banks of all sizes as well as nonbank financial institutions. They are represented in the Association by 18,500 individuals located throughout North America, Europe, Australia, and Asia/Pacific.
Frank Devlin, firstname.lastname@example.org, 215-446-4137